What is the difference between a lease with option to purchase and an option to purchase?

The difference between a lease with option to purchase and an option to purchase in Pennsylvania residential real estate law is that the former is a lease contract with a clause allowing the tenant to purchase the property during or at the end of the lease period, while the latter is a contract that gives the buyer the right, but not the obligation, to purchase the property during the option period. A lease with option to purchase is a legally binding agreement in which the tenant agrees to rent the property for a specified period of time, usually one to three years. The tenant also agrees to pay rent throughout the term of the lease and to abide by the terms of the lease agreement. In return, the tenant has the option to purchase the property for a specified amount at any point during or at the end of the lease period. An option to purchase is a non-binding agreement in which the option giver (the owner) grants the option taker (the buyer) the right to purchase the property within a specified period of time in the future. The option taker pays the option giver a one-time fee in exchange for this right. The option taker can decide whether to exercise their option to purchase the property within the option period. If the option is not exercised by the end of the option period, the option will expire and the option fee is forfeited.

Related FAQs

What is an assignable mortgage?
What are the requirements for a down payment?
What is a “due on sale” clause?
What is the difference between a lease with option to purchase and an option to purchase?
What is a Warranty Deed?
What is an FHA loan?
What types of transactions does residential real estate law cover?
What rights do I have when buying a home?
What is an assignment of rental income?
What is a quit claim deed?

What is the difference between a lease with option to purchase and an option to purchase?

Related FAQs

Related Blog Posts