real estate owned

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Real Estate Owned

Describing property owned by a lender after a foreclosure and the lender's subsequent failure to sell at a foreclosure auction. That is, if a bank forecloses on a property, it attempts to sell the property at an auction for an amount at least equal to the outstanding loan and associated fees. If it fails to do this (usually because the market value of the property is less than the outstanding loan), the property becomes real estate owned. The bank then attempts to sell the property at whatever price it can find. Real estate speculators often seek out real estate owned property because they can sometimes buy it for less than the market value.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

real estate owned (REO)

Foreclosure property held by a lender.

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.
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"I'd prefer that they're counseled by someone experienced in selling bank REO properties," he says.