Real estate-owned property, or REO, is property that a lender takes back after it fails to sell at a public auction. These bank-owned homes often offer great below-market values and are listed by real estate agents. Buying an REO is a bit different from a regular sale, since properties are usually in need of some repair and may even have been abandoned or vandalized. “As is” means what it says in these cases. Buyers must negotiate with the bank, which can be difficult, though experts said the process can be less time consuming than a short sale.