What does “REO” stand for in real estate terminology?

"REO" stands for "Real Estate Owned," which refers to properties that are owned by a lender, typically a bank, after an unsuccessful sale at a foreclosure auction. When a property goes through foreclosure and is not sold to a new owner, it becomes part of the lender's portfolio, and thus it is labeled as REO.

This term is significant in the real estate industry because it pertains to properties that are in the lender's possession and often need to be sold in order to recover some of the financial losses from the original mortgage. Typically, these properties are sold at a discount compared to market value to attract buyers.

Understanding the concept of REO is crucial for real estate professionals, especially those involved in marketing and selling such properties, as they often stand apart from traditional residential listings. The knowledge of REO properties can help agents provide better service to clients who might be looking for investment opportunities in distressed properties or bargain buys.