The lease option is a method of selling property, most commonly used in a down market. It involves leasing the property to a hopeful buyer along with an option to buy at a set date and usually at a set price.

A portion of each month’s rent is applied toward a down payment. At the termination of the lease, when, hopefully, the down payment has been reached, the buyer gets a mortgage, and the sale is completed. With a lease option you can have all the problems inherent in renting, including maintenance and the possibility of having to evict the tenant for nonpayment of rent. These risks, however, can be minimized by getting a hefty security deposit and by carefully screening the applicant, making sure that your tenant has a previously successful rental history.

A land contract of sale (also called a contract for deed) is an old form of transferring property used for years in bare land sales where the buyer couldn’t come up with the full purchase price in cash. The seller gives the buyer a contract to buy that states if and when the buyer ultimately comes up with all the cash, title will be transferred—no cash, no title. During that time the buyer usually can work or occupy the property.

Today, the land contract is still used by investors to purchase properties that they otherwise can’t get into, and to sell properties that they otherwise can’t get rid of.

Dustin and Rebecca Snook believe they could have listed their North Las Vegas home for more, but considering softening conditions, were prepared to compromise. The decision appears to be paying off.After about only a month on the market, Dustin Snook said they received a full offer on their approximately 2,500-square-foot home, listed at $475,000. “We thought we should probably go for $75,000 more, but we bargained out what could be accomplished with the listing price. We had to go with a price that was reasonable for the time,” said Snook, 34, who is self-employed.