REO

Real Estate Owned (REO) is a term frequently used by lending institutions as applied to ownership of real property acquired for investment or as a result of foreclosure.

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REO is property owned by a lender, usually a bank, after an unsuccessful sale at a foreclosure auction (Trust Sale). The bank will then go through the process of trying to sell the property on its own. It will try to remove some of the liens and other expenses on the home, and then try to sell it through the use of real estate agents. 

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If the buyer of an REO is making any moving plans, they should note that a closing delay could occur. The bank, as the seller, will set the pace of the transaction. This is especially true in the last days prior to closing.