What is a lease option for a house?

A lease option is a legal agreement that provides a tenant with the right to purchase the property they are renting at a predetermined price within a specific time frame. This arrangement typically includes a lease agreement combined with an option to buy, allowing the tenant to 'test drive' the home before committing to the purchase.

In a lease option agreement, the tenant makes regular rental payments, and a portion of those payments may sometimes be applied toward the purchase price if the tenant decides to exercise the purchase option. This type of agreement is particularly beneficial for tenants who may need time to secure financing or improve their credit score in order to qualify for a mortgage.

The other options do not capture the essence of a lease option. For instance, renewing a lease relates to extending the rental period without an intention to purchase, while a clause for rent increase addresses pricing adjustments rather than the option to buy. Additionally, the right to sublet pertains to allowing another party to rent the leased property but does not involve the purchase of the property itself.