What does "REO" stand for in real estate terms?

The term "REO" stands for "Real Estate Owned," which refers to properties that are owned by a lender, typically as a result of foreclosure. When a homeowner defaults on their mortgage, the lender repossesses the property and it becomes part of their inventory of real estate assets. These REO properties are often sold at a discount by the lender, who is trying to recoup their losses from the defaulted loan. Understanding this term is crucial for real estate professionals as it directly relates to the process of foreclosure and the management of properties in a lender's portfolio.

The other options revolve around concepts not widely recognized in standard real estate terminology or refer to different aspects of real estate transactions. For example, "Real Estate Option" pertains to agreements that give potential buyers the right to purchase a property at a predetermined price, which is quite different from the concept of ownership by a lender. Similarly, "Residential Equity Offering" and "Rented Easement Ownership" do not reflect accepted definitions used in real estate practice, focusing on types of agreements or ownership structures not directly involved with the aftermath of foreclosure and lender property management.