Oregon Real Estate Practice Test 2026 – Your All-in-One Guide to Exam Success!

A lease option agreement in real estate refers to an arrangement where a tenant leases a property with the added benefit of having the option to purchase that property at a later date, typically under specified conditions. This type of agreement provides tenants with the opportunity to "test out" the property while having the security of being able to buy it in the future if they choose.

This option benefits potential buyers who may not currently have enough capital for a down payment or who want to ensure that they wish to commit to a property before purchasing. The lease agreement typically outlines the terms of the lease, the duration of the option to purchase, and the price at which the tenant can buy the property.

In contrast, other options provided do not reflect the nature of a lease option agreement. A contract for immediate purchase signifies a straightforward sale without any leasing component, while a legal document to terminate a lease early involves breaking a lease agreement entirely, which does not include a purchase option. Lastly, a rental agreement without any purchase options does not convey the dual purpose of leasing along with a potential purchase, which defines a lease option agreement.