Instead of an outright purchase of a home, a lease with the option to buy can make more deals happen.  Here are some benefits that often occur in these type transactions: Seller Benefits: 1.  Instead of selling a property with seller financing, when a seller does a lease option they still have the title to the property.  If the buyer does default for whatever reason, then the seller can usually evict the lessee in a much more timely manner than going through the foreclosure process.  The lessee is not the owner. 2.  Instead of receiving a down payment on the sale, the seller/lessor will receive an option deposit.  Whether this option deposit is $5,000 or $500,000 it is typically treated just like a security deposit.  It is not reported on the sellers tax return until the option either ... 02/22/2009