a lease option
lease option sales first became popular financing instruments in the late 1970s and early 1980s, and they were primarily used as a way to circumvent alienation clauses in mortgages. the buyer and seller might agree to a purchase price at that time, or the buyer can agree to pay market value at the time their option is exercised. the buyer also agrees to lease the property from the seller for a predetermined rental amount during the term of the lease option agreement.