In a lease-purchase arrangement, the buyer and seller enter into a contractual relationship where the buyer will lease the seller's home for a predetermined amount of time, at the end of which, they will close on the house.

In some lease-purchase arrangements, the potential buyers are under no obligation to close on the house if they choose not to. In others, the buyers put down a deposit that, if they don't close within the stated amount of time for any reason, they will forfeit to the sellers.