Real estate owned
A property the bank took back at foreclosure auction and now owns. Banks list REO through agents like any other seller, but usually sell as-is with limited disclosures.
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Part 1 of 4
Why a seller cares
An REO is a home the bank took back and is selling as-is with no seller disclosure. If you are buying your next home from a bank, the inspection is your only disclosure; if a neighbor's REO is a comp, it is usually a low one.
Part 2 of 4
A simple example
The house two doors down was an REO that sold for $240,000 as-is. Your appraiser uses it as a comp and adjusts upward for condition.
| Where the REO shows up | What it means |
|---|---|
| As a comp for your sale | A low anchor that a good appraiser adjusts |
| As your next purchase | As-is, bank addenda, and no disclosure to rely on |
| In the neighborhood generally | A drag on prices while it sits, and none once it is occupied |
Bank-owned homes sell cheaper and disclose less, and both facts touch the homes around them.
Part 3 of 4
What people get wrong
That an REO comp proves your home is worth less. It proves what a bank took for a house nobody lived in, and appraisers know the difference.
Part 4 of 4 · where to read next
Where it appears in the sale
What a definition is, and what it isn't
Keighbor is a software company, not a law firm, brokerage, or tax adviser. This is general information, not legal, tax, financial, or real estate advice about your sale. Your situation may differ. Before acting on a contract, disclosure, title, tax, or pricing question, ask an appropriately licensed professional in your state.
Written and researched by Keighbor Research · drawn from the reference glossary · how we research and check what we publish
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