Homes can become bank-owned properties if the homeowner defaults on their mortgage and the bank forecloses. Bank-owned properties may also be referred to as real estate owned, or REO for short.

Bank owned properties, aka real estate owned or REO, are those that have been taken over by lenders due to problems paying the mortgage. These properties may be sold at bargain prices to move quickly.

Getting a bargain or reduced price on a home in today’s market seems like a long shot. But a bank-owned property may offer one way for a homebuyer to purchase an affordable home or a home in an area ...