What does REO stand for in real estate?

Answer 1

REO stands for 'real estate owned'. It is the term used to describe property that is in the possession of a lender by virtue of a foreclosure. That means the foreclosure has already taken place, the bank has the title to the property and the bank can sell it. When purchasing REO property is is extremely important to have the title examined by a professional title examiner and the title certified by a competent attorney . Many lenders, to save money, have only the present owner checked at the time of the foreclosure. Due to the professional laxity in purchasing and mortgaging real estate over the past 10-15 years REO properties are fraught with title defects and undisclosed liens and encumbrances that occurred during prior ownerships. Also, many title insurance companies have been "insuring over" defects rather than resolving them. You need to know if there are any title defects on the property prior to purchase. The only way to protect your investment is to have an attorney who is a real estate specialist represent you if you decide to purchase REO property.