What does "REO" stand for in real estate?

"REO" stands for "Real Estate Owned." This term is used primarily in the context of properties that are owned by a lender, typically a bank, after an unsuccessful foreclosure auction. When a property fails to sell at auction, it reverts to the lender and enters their inventory as an REO property. Understanding this term is important for individuals involved in real estate transactions, particularly in relation to foreclosures, as these properties can often be acquired at a lower price compared to traditional listings.

The other options do not accurately define REO. For instance, "Real Estate Obligation" suggests a commitment or liability related to real estate, which does not capture the meaning of properties held by a lender. "Residential Equity Ownership" focuses on the ownership rights and financial aspects of residential properties, but does not convey the specific state of a property after foreclosure. "Real Estate Office" refers to the business entity involved in real estate transactions, which is unrelated to the condition of the property itself.