REO (Real Estate Owned)

REO, or Real Estate Owned, refers to properties that a bank or lender owns after unsuccessful foreclosure proceedings. When a homeowner defaults on their mortgage and the property is repossessed, it becomes an REO asset. The lender then manages and attempts to sell the property to recover the unpaid mortgage balance. REO properties are typically sold through real estate agents or auctions and may be priced below market value to facilitate a quick sale. They are often in need of repairs or updates, and purchasing an REO can be an opportunity for investors or buyers looking for property at a discounted rate.