Have you come across a potential buyer for your home that for one reason or another isn't able to qualify to purchase your home at this time?  Maybe they have experienced a severe financial crisis, like a bankruptcy/medical devastation/job loss/foreclosure, making them unable to obtain the financing they need to purchase your home, even though they have recovered from the event that led to their credit crises.  You don't need the equity from this home to purchase your next one, and you like the idea of having a tenant in the home committed to purchasing it down the road.

Pros:

• You do not need to wait until your home sells to move forward with your purchase
• You will be able to live your lives without the need to be prepared for showings of your home
• You may set the price at a future date when the real estate market has stabilized and values increase
• You may receive purchase money deposit from your prospective buyer/tenant and/or a higher monthly rent that would be applied to the buyer's down payment when they purchase or forfeited if they do not purchase by the date you set

Cons:

• Values could potentially decline more than the amount of deposit/excess rent payments you receive
• Your tenant could decide not to exercise their option
• If the option is recorded, it could cloud the title to the property in the even of a dispute between you and the tenant/buyer
• You have extended contact and interaction with the tenant/buyer vs. being closed and done with an immediate sale

These can be complex transactions, and both sides should obtain legal/tax advise before completing a transaction like this.  

http://activerain.com/blogsview/771989/Do-You-Believe-Lease-Options-Are-A-Viable-Tool-In-Todays-Market

See you at the closing table!

Karen Cooper - OR/CA Mortgage Consultant - www.Quality4Loans.com