In real estate, what does "REO" stand for?

"REO" stands for "Real Estate Owned." This term is commonly used in the real estate industry to refer to properties that are owned by a lender after the foreclosure process has been completed. When a homeowner defaults on their mortgage, the property is taken back by the bank or lender through foreclosure, and once the foreclosure is finalized and the lender takes possession, the property is classified as REO.

Properties classified as REO are typically sold by the lender to recover the losses from the mortgage. They may be listed for sale through real estate brokers, and the lender may make repairs or adjustments to the property to make it more marketable. Understanding the implications of REO properties can be crucial for buyers and investors, as these properties often come with unique challenges and opportunities compared to traditional home sales.