REO stands for Real Estate Owned and refers to properties that have been foreclosed on, and currently for sale by the bank. They can generally be a good value, since they may be somewhat in disrepair. Sometimes this means they just need cosmetic work, sometimes they need more work ...

I admit that the title is a little misleading! *wink* The cost of the renovation was actually rolled into our mortgage, so we did in fact pay for it ourselves. Despite being a real estate buff since I was very little, I was not aware that these types of loans ...