What does the term REO stand for?

The term REO stands for Real Estate Owned. This designation is commonly used in the real estate industry to refer to properties that have been foreclosed and are now owned by a lender, typically a bank. After a foreclosure auction, if a property does not sell, it reverts to the bank and is subsequently termed as REO property.

In the context of real estate, this is an important concept because understanding REO properties can provide insights into potential investment opportunities and the state of the housing market. Banks will often look to sell these properties, sometimes at lower prices, to recover some of their losses from the mortgages that defaulted.

The other terms listed do not accurately represent REO's meaning in the real estate context. Recognizing this terminology is essential for real estate professionals, as it affects how properties are bought, sold, or financed.