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Rent with option is just that.......the prospective renter/buyer usually pays the owner an option fee up front for the right to purchase the home at a later date. Meanwhile, the renter pays his monthly rent to the owner with a small portion of the rent credited toward his downpayment if he decides to exercise the option to buy. If he decides not to buy, he forfeits his option moneny to the owner and the contract is then void. Much more to it, but that is the basic idea.
Owner finance is a straight sale with the buyer taking full possession of the home and the owner holding the first mortgage note on the house. All details of the sale are negotiated between buyer and seller.
Main difference is that with rent w/ option, the owner is still the owner of the house until the option is exercised. With owner financing, the transaction is final.
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