Once a foreclosure has gone to auction and failed to sell or the lender purchases the property back at auction, it becomes a Real Estate Owned, or bank owned, property.
An REO property is the least likely of the foreclosure properties to represent a bargain, but it is also the least risky. The property can be fully inspected, any title issues can be found and dealt with, and the sale can be subject to a mortgage. REO properties also tend to be in better condition than other foreclosure properties as the mortgage servicers often makes repairs prior to listing the property.
REO’s are marketed on the MLS by local agents and available to purchase.