Question: What's a "REO" property? Answer: When a property goes to foreclosure there's an effort to sell it at auction for as much as possible. The lender will typically bid a given amount, usually the value of the loan balance but less in some markets. If no one makes a better bid, then the lender winds up with title to the property. Once the lender has title, the property is called a "REO" -- an expression which means "real estate owned" by the lender.