Lease with an option to purchase is a simple concept.
Typically, when you lease a home, the landlord already owns the home you will be leasing. This works slightly differently.
The landlord screens you first and if you their criteria, they authorize you to go out and search for the home you would like to lease that is listed for sale. The landlord then purchases the home and then leases it to you. Along with leasing a home you really want, the landlord also enters into an obligation with you that you have the first right to purchase the home if you choose. You will have 3 years to make that choice, and if within that 3 year period you decide you want to purchase the home, you will need to obtain financing and purchase the home from the landlord.
Before you enter into the initial lease with an option to purchase agreement, you will know exactly what your lease amount will be for the following 3 years, and the exact amount you can purchase the home for, at any point in those 3 years.
And no, you are not obligated to purchase the home. At any point your only obligation is a 12 month lease period.