What does "REO" stand for in real estate?

In real estate, "REO" stands for "Real Estate Owned." This term is primarily used to describe properties that are owned by a lender, typically a bank, after an unsuccessful sale at a foreclosure auction. When a homeowner defaults on their mortgage, the property may go through foreclosure. If it does not sell at the auction, it becomes part of the bank's real estate inventory.

REO properties represent a significant aspect of the real estate market, especially in the context of distressed properties and foreclosures. These properties are usually sold at market prices, and lenders often seek to dispose of them quickly to recover their losses. Understanding the term "REO" is crucial for anyone involved in real estate, as it helps in identifying potential investment opportunities and understanding the landscape of property ownership post-foreclosure.

The other options do not accurately reflect the commonly accepted terminology in the real estate industry, making "Real Estate Owned" the correct definition.