What is the difference between a Land Contract and a Lease Options agreement?

Question by Jron: What is the difference between a Land Contract and a Lease Options agreement?
My cousin is a Real Estate Investor and he is trying to help a family sell there home. They told him that they do not want to do a Land Contract, because they are afraid they won’t qualify for a mortgage? Is there anyway for them to get around this? Also, he said when he spoke to them on the phone, He mentioned a lease option, not a Land Contract. How could he explain the difference? What do you think would be the better option, a lease option or a land contract? Why do you feel that way?

Best answer:

Answer by Lauren N
The difference between a lease option and land contract, mainly is the buyer’s intent. A land contract is a form of agreement where the buyer is making installments on a purchase, almost like a mortgage with the owner holding the note. A lease option is similar but it is viewed as a form of rent where they have the “option” of buying the house but may decide not to. Both can negatively affect the credit of the homeowner because they can be viewed as overextended by a potential lender.

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