Real Estate Definitions - Part 1 - Define REO, Foreclosure, Bank Owned

Let' s begin this series with terms that are the topic of nearly every real estate conversation these days.

REO, Foreclosure and Bank Owned are terms that refer to the same thing; a property (also referred to as an asset) that has been taken back by a bank or financial institution due to default on a loan or debt that was secured by that property. While a foreclosure is actually a legal process, it is also used to describe a property that has been through the foreclosure process and is aslo referred to as a REO (Real Estate Owned) or Bank Owned.

When these properties are listed for sale by real estate agencies, the title is usually clear and there are no liens. As a good consumer, you should verify the status of the title and not assume anything. Caveat emptor - let the buyer beware.

Please use these definations for informational purposes only and should not be construed as legal advice.