During the term of the lease you are given the ability to exercise your option to purchase for a previously agreed upon price.

The most important process in REI is the due diligence, so do it as an exercise even if the deal looks iffy.  

The lease was signed in 2006.In my lease, one clause is the option to renew: Lessee, shall have the option to extend the term of this Lease upon the same terms and conditions set forth herein for the following period(s): One term of two years at a new rent rate of $16.50/sqft and then ten terms of two years each under the same terms and conditions also to include a 3% COLA increase in non-mortgage related expenses in each successive year as a tenant"So rather than lock myself into a 7 year term, I can continue to just exercise my ten options of two year terms all the way through 2026.

And while it's true that if the buyer couldn't get a loan and was unable to exercise the option the rehabber would keep the option fee, that also would result in potential lost opportunities for the rehabber/seller (other potential buyers, possibly even willing to pay more), all while they continue to pay holding costs.

Or get an option agreement and then assign the option or don't exercise it.

Every escrow and property is different, but as long as the contingency is exercised in good faith, it is up to the buyer's discretion and approval for the most part. 

In a Lease Option the loan is still in place but the Deed doesn't convey (change hands) until the Option is exercised.The differences are in how foreclosure happens in the event of non-payment and the underlying mortgagor has the option to exercise the Due on Sale Clause.

Our market is tight and competitive, so be patient, run the #'s w/ thorough due diligence, and exercise discipline in not overpaying just to get a deal.  

Thanks for the well wishes, but more so for the advice to exercise caution and the analysis.

BillNow what idiot is going to buy subject to the option unless there is very little chance of the option being exercised, and even with very little chance there is some chance.