What is a Purchase Lease Agreement?

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  • Written By: Luke Arthur
  • Edited By: Heather Bailey
  • Last Modified Date: 21 September 2019
  • Copyright Protected:
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A purchase lease agreement is a type of real estate transaction that involves both a lease and an eventual sale. This process begins with a lease period when the tenant rents the property from a landlord. After a certain amount of time, the tenant is going to then purchase the property from the landlord for a predetermined price.

A seller will often offer a purchase lease agreement to attract more potential buyers. This type of agreement allows the buyer of a property to get enough time to build credit. The buyer is attracted to this type of deal because he or she can secure a property for a certain amount of time.

One key element of the purchase lease agreement is the option money. At the beginning of this transaction, the buyer is going to provide the seller with a certain amount of option money. This is going to be a negotiable amount of money. The option money is paid to secure the right to buy the property at a date in the future. The buyer and seller will also agree to a future date in which the sale will take place.

After the option money is paid, the lease term will begin. During this part of the process, the tenant is going to pay rent to the landlord. This section of the purchase lease agreement is just like a traditional rental agreement.


At the end of the lease term, the renter will then have the option to buy the property. It is important to realize that the renter is not necessarily obligated to purchase the property at this time. If the renter chooses to buy the property, it will be conveyed at the purchase price that was agreed upon when the initial contract was signed. If the renter chooses to walk away, the option money will be kept by the seller of the property.

The purchase lease agreement can be beneficial to both parties involved. The seller will be able to bring in a new market of individuals to consider buying the property. The buyer will be able to secure a property even though his or her credit is not in good shape. The buyer could also get a good deal on the property because the price is being negotiated today even though the property will be sold at a date in the future.



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