First, it’s all in the contract. The buyer and seller agree to the terms.

Usually Rent-To-Own means that part of the money paid every month goes toward the rent and part goes to the purchase of the house.

Lease with an option means that you buy an option to purchase the house at a specific time in the future and you rent it in the meantime.

There is also a “delayed” purchase, in which you actually make a downpayment on the house, and start paying toward ownership, but the sale is not recorded until a later date. This is generally done for tax purposes.

Your financial advisor or a good real estate agent can explain the advantages and disadvantages of each, and should be able to help you choose a plan that works for you.

YARNLADY is correct. You do need to evaluate both options to discover which is better, either one could be better according to how the agreement is written.

Yes, it’s all about the contract. Everything is always negotiable, but it is good to know what is customary so the seller does not get annoyed if it seems you are pushing too far or asking too much. Although, right now the buyer has the power in the majority of the housing markets in the US. If your realtor is not very familiar with any of these (I was a realtor and never had a contract that had an option to buy or lease to own, even though we learn about it in real estate school, it is rare in the community where I lived) I would be sure to have a real estate lawyer look over the contract to make sure it actually says what you want.

@JLeslie Good point. I came from a real estate family, and the number rule for buyers is to always put a contingency that the contract must be approved by your lawyer. You don’t even have to actually have a lawyer (although you should) but it gives you time to re-read the contract and talk it over with other people. You can remove the contingency after a few days.

Yes. Very few states require a lawyer or customarily use lawyers for real estate contracts, but I recommend it. When I got my real estate license I took a one week course and took a test, boom I can sell real estate. Over time you do get very familiar with the contracts and various situations, but if it is an uncommon transaction I would seek a lawyer even though I sold real estate myself. True you can just put the contingency just to give you some time to mull it over and not even show it to a lawyer if you want.