[Porsche-O-Phile]

The most important factor for us was down payment (the money we'd saved for one got wiped out paying bills/rent/etc. after being laid off) and uncertainty about the short-to-intermediate "recovery" and associated job stability. To be honest I probably COULD HAVE sold off enough stuff and scraped together another down payment, but I figured it just wasn't worth it given the uncertainty that's still out there and will likely be there for quite a while to come. So I didn't. My primary factor (as it is for a lot of others I'm sure) is that there's still not enough certainty that this so-called "recovery" is really going to hold. Even the taxpayer housing credit wasn't enough to entice me. I'm not about to lose (potentially) tens of thousands or hundreds of thousands of dollars, my reputation and my creditworthiness for a lousy $8k (which has to eventually be paid back anyway).

As with most things, purchase options have their place for the proper individual/circumstance. They should not be dismissed outright, especially if you're underwater on a property and looking to get something for it rather than having it sit in a stagnant market in perpetuity.

Consider also that the banks are sitting on literally MILLIONS of foreclosed properties right now. They're deliberately holding a lot of them off the market to keep prices artificially high in the hope of offsetting the short-term carrying costs (taxes, maintenance, someone to drive by and check on them a couple times a week) through letting them trickle back on. However, foreclosures have NOT peaked - they're still rolling right on in and defaults in commercial RE are starting to climb. There is likely to be a "panic sell" of a lot of these properties in the coming months, which may well push prices down in a lot of markets and which will certainly make it tougher for a private party to sell (you have to compete against that many more REOs).

Your market might be different, but I also think - in general - that this situation still has a way to go before hitting a real "bottom" and the foreclosure numbers/inventories start really dropping.

Given that, purchase-option made a hell of a lot of sense for me.