What is an option fee, and how does it fit into the price?
The option fee is part of the total cost of the home, buys your locked price and your right to purchase, and isn't refunded if you walk. Here's how to think about it.
The most misunderstood number in rent to own is the option fee. Here's the whole thing in three parts.
It's part of the total cost
The price on every Upswing listing is the total cost of the home. Subtract the option fee and you have the purchase price on the option agreement. A $150,000 home with a $7,500 option fee has a $142,500 purchase price. Pay the fee and you've covered the first $7,500 of your total; the rest is what you pay when you buy.
It buys certainty
A written price that can't move for 36 months, a rent that can't move for 36 months, and the exclusive right to buy this house on those terms. In a rising market that is worth a lot. In a falling market, you walk away and your loss is capped at the fee.
It isn't refunded
If you don't buy, the seller keeps it. That's the price of holding a home at a fixed price for three years. (It is also not the security deposit, which is separate under the lease and refundable per the lease.)
Two ways to pay it
All at signing, or the smaller amount shown for the home at signing with the balance spread over 24 months alongside rent. The 24-month plan, with the math.
Upswing Homes offers rent to own (dueño a dueño) homes in Tulsa under a 36-month lease and a separate option to purchase. The advertised price is the total cost (option fee + purchase price). No rent credits; option fee non-refundable; financing not guaranteed. General information, not legal advice.