A more thorough explanation:

REO

REO stands for Real Estate Owned. It refers to a property that is owned by a bank or lender after it has been foreclosed on and failed to sell at a foreclosure auction.

For example, if a homeowner defaults on their mortgage payments and the bank forecloses on the property, the bank may then take ownership of the property and list it as an REO property for sale.

Another example is if a property is purchased with a mortgage and the owner fails to make payments, the lender may foreclose on the property and take ownership, making it an REO property.

REO properties are typically sold by the bank or lender at a discounted price in order to recoup some of their losses. These properties can be a good opportunity for buyers looking for a deal, but they may also require some repairs or renovations.