Texas Real Estate Brokerage Sales Apprentice Education (SAE) Practice Exam

What is the primary goal of a lease option agreement?

1. To gain rental income

2. To allow tenants to purchase the property later

3. To facilitate a short-term lease

4. To reduce the base rent

The correct answer is: To allow tenants to purchase the property later

The primary goal of a lease option agreement is to provide tenants with the opportunity to purchase the property at a later date. This type of agreement combines elements of a traditional lease and a purchase contract, allowing tenants to rent the property with the option to buy it before the lease expires. This arrangement is beneficial for tenants who may not currently be in a position to buy a home but want to secure the option to do so in the future, potentially locking in a purchase price. It also allows them to test out the property and the neighborhood before making a significant financial commitment. While rental income and short-term leasing are aspects associated with a lease, they do not encompass the fundamental purpose of a lease option. Similarly, lowering the base rent is not a primary intent of this type of agreement, as the focus remains on providing tenants with a pathway to homeownership.