The down payment/deposit is refundable?  That is really weird.  What is the purpose of it if it is refundable?

If it was NOT refundable, I would say it clearly looks like it was sold in an Installment Sale, regardless of their terminology of calling it an 'option'.  I still lean towards that it is an Installment Sale, but because the deposit is refundable, that portion would not be applied to the Installment Sale until it becomes non-refundable.