Every rent-to-own deal has four components:

1. Option fee (non-refundable, upfront): typically 1-5% of the agreed price, paid immediately. On a $300,000 home: $3,000-$15,000 gone if you don't close.

2. Monthly rent (above market): normal rent plus a premium of $150-500/month. You get occupancy; the seller gets above-market income.

3. Rent credits (conditional): 10-25% of monthly payments designated as credits toward the purchase price — only matter if you close. Gone with the option fee if you don't.

4. Strike price (locked now): agreed at contract signing, typically at or above current market value. Appreciating markets can work in your favor; flat or declining markets mean you're paying tomorrow for yesterday's price.

Lease-option: you have the RIGHT but not the obligation to purchase. Walking away costs the option fee and credits but creates no further liability.

Lease-purchase: you have an OBLIGATION to purchase. Missing the close may expose you to breach-of-contract damages beyond fees already paid.

This distinction is the most important legal fact in any rent-to-own — and informal contracts frequently blur it. Have a real estate attorney confirm which structure you are signing before any money changes hands.

At option expiration, three outcomes:

• You qualify and close — the intended outcome, happening in 40-60% of agreements.
• You cannot qualify — option fee forfeited, rent credits gone, vacate as a tenant. Non-closing rates: 40-60%.
• Option is extended — usually for an additional fee, resetting the premium-rent clock at your expense.

The 40-60% non-closing rate is the number rent-to-own marketing omits. Most people who sign these agreements never close, having paid premium rent for years and an upfront option fee with nothing to show for either.