When sellers are fighting tooth and nail for the limited buyer that exist in a "buyers market", the gloves come off. 5 years ago, in the heat of the real estate frenzy, you rarely spoke the terms "lease option" or "lease purchase" out loud. Sellers would laugh you right off their front porch if the question was posed.

Fast forward to today and we see quite a different story. Sellers are considering all kinds of creative options to achieve their real estate goals. I have been in the real estate business for 11 years and have only dealt with two lease options. Now, I have facilitated 3 in the last 30 days! When sellers can’t get  buyers to  make a traditional offer, they are desperate enough to take the risk that goes along with an option or lease purchase.  They figure, if it doesn’t go to close, at least they will be getting their mortgage paid and might be in a better market by the end of the contract period.

What is a lease option or lease purchase you ask? They are very similar in nature but differ in the fact that one, the lease purchase is more like an extended closing date on a purchase of a home with a lease for the time before closing occurs; while the lease option is more of a lease on a home with an option, not an obligation, for the lessee to purchase at a certain agreed upon date. Its a "right of first refusal" of sorts.

This type of arrangement can benefit both parties in the transaction. In researching for this posting, I found a great website at The Front Door - Financing that features an article by Robert Bruss about the pros and cons of both the lease option and the lease purchase. Bruss explains a lease option as 

"a combination real estate rental, sales and finance technique.  It is a property lease for a fixed time period, such as 12 or 24 months, with an option for the tenant to buy the property at an agreed option price during the lease term".   

This scenario is an advantage to the buyer because little up front cash is required. Usually a 1% option fee that is non-refundable if they do not exercise their option but will get credited back towards the purchase price if they do option to purchase the property, and the security deposit on the lease.
    Sellers will consider the lease option "because they provide necessary cash flow to pay the
    mortgage and property taxes from a tenant who has a vested interest in treating the
    property well and who is likely to buy it", says Bruss.   

The lease-purchase differs from a lease-option because it obligates the tenant
    to purchase the property at the end of the lease. There is usually an earnest money deposit that is held until closing, the terms of the contract are set up front and a lease agreement is made part of the contract which usually allows for a credit from each months lease payment to be applied to the purchase price at closing. If the buyer fails to close then the sellers owes no credits. With both, however, the tenant usually pays an above-market rent and
    receives a monthly rent credit toward the down payment. Of course, both a lease-option and
    a lease-purchase obligate the seller to sell the property on the agreed terms.

So if you’re not getting lucky in the sales department, perhaps you should advertise the possibility of a lease purchase or lease option to own. It just might be the ticket!