Lease with Purchase Option

Lease with Purchase Option

In a down real estate market, is there a way to postpone setting the price until the buyer is ready to exercise the option? I don't want to set the price at the beginning of the lease, because prices are falling.


You can give the prospective buyer a lease with an option to buy the property at some future date. You can specify in the purchase option that the price will be set by appraisal when the option is exercised. That is fair the the tenant/optionee because the price will be a fair price at the time of exercise. It solves your goal of fixing the price at a later date when the market recovers. But that recovery will remain a risk you take. The legal documents should be prepared by a real estate specialist, but will generally be a lease with an attached rider including the option terms. Although it is a bit dated, there is an entire chapter on this issue in an understandable format in Shenkman "How to Buy a House with Little or No Money Down" which you may still be able to get from You might also consider giving the tenant a credit of say 10% (or more) of each month's rent to encourage them to purchase.

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