I have been getting several contacts lately with people wanting to know how a lease purchase works.  A Lease-Purchase Contract, also known as a Lease Purchase Agreement, is the heart of Rent-To-Own properties. It combines elements of a traditional rental agreement with an exclusive right of first refusal option for later purchase on the home. It is a shortened name for Lease with Option to Purchase Contract.  Many people want to do lease purchase options if they have poor credit, have a current home they are needing to sell, recovering from a bankruptcy, etc...  

You can have option fee which is the initail payment you need to make, and goes towards the down-payment for the property at the end of the lease agreement.  You will want to determine how much you will be paying monthly, and how much of your monthly payment will go towards the eventual down-payment of the property at the end of the lease agreement, the price of the home is typically determined at the time of the lease.  Also, all inspections are done typically before the lease commenses.  

Sellers have to beware because most buyers that enter into a lease option contract are not able to repair the situation that caused them to lease in the first place.  However, I have seen them work out and close within a certain timeframe and everyone wins.  It is all based on the integrity of the buyer.