The rebound in U.S. home prices since the pandemic has largely kept the foreclosure machine from roaring back to life. But a different reality is setting in across servicing departments and asset-management desks: distress activity is edging higher, and with it, a small but meaningful pipeline of REO properties—real estate owned by lenders after foreclosure.
The shift is easy to miss. It isn’t 2009. It looks less like a wave and more like a steady trickle—properties that don’t clear at auction, homes that require preservation work, and transactions governed more by compliance checklists than curb appeal.
For investors and would-be owner-occupants, REOs can still offer pricing advantages. For lenders, they are a carrying-cost problem. For a specialized group of real estate professionals, they are an operational business: the REO agent.

What REO Actually Means—and Why It’s Different From “Foreclosure”

REO is industry shorthand for a property that has already gone through foreclosure and is now owned by the lender, typically because it didn’t sell at a foreclosure auction.
That distinction matters. A property “in foreclosure” is still in process; an REO is already in the lender’s inventory—an asset that now needs to be secured, valued, marketed, and sold under institutional rules.

A Pipeline That’s Rising, Not Surging

Nationally, indicators of stress have moved up from their post-pandemic lows. The Mortgage Bankers Association reported that mortgage delinquencies increased in Q3 2025, and foreclosure starts also ticked up. Separately, ICE’s Mortgage Monitor recently noted late-stage (90+ day) delinquencies rising even as some early-stage metrics improved.
Meanwhile, foreclosure filings have risen year over year. ATTOM-based summaries cited in the trade press put 2025 foreclosure filings at roughly 367,460 properties, about 14% higher than 2024, while still below pre-pandemic levels.
The point isn’t that a crisis is here. It’s that the distressed-asset “background noise” is getting louder, creating more situations where lenders must dispose of homes efficiently—especially when properties are vacant or need work.

The Institutional Logic Behind REO Sales

Once a property reverts to the lender, the sale process becomes less “home sale” and more “asset disposition.”
Before an REO hits the market, it typically goes through a standardized sequence:
  • valuation (often including a Broker Price Opinion, or BPO)
  • occupancy checks
  • basic preservation and securing
  • title review and closing coordination
BPOs, in particular, are commonly a first-order task in REO workflows.
The seller—the bank or servicer—optimizes for certainty, documentation, and timeline discipline. Negotiation is often constrained by internal approval ladders and standardized addenda.

What an REO Agent Really Does

In a conventional listing, an agent’s edge is marketing, negotiation, and transaction management. In REO, those basics are table stakes. The job is closer to a hybrid of operations lead + compliance coordinator + market analyst.
Typical REO agent responsibilities include:
1) Asset-manager coordination and reporting
REO agents interface with lender/servicer asset managers, meet documentation requirements, and keep timelines moving—often inside vendor platforms and templated workflows.
2) Valuation and pricing discipline
They produce BPOs and pricing recommendations that reflect condition, local comps, and market velocity—not just aspirational list prices.
3) Preservation and market readiness
Securing a vacant property, coordinating lawn care and debris removal, addressing safety issues, and arranging photography are common. The goal is to minimize vacant days and reduce liability.
4) Contract and closing execution under lender terms
REO contracts are addendum-heavy and deadline-driven. Missing a procedural step can kill a deal as quickly as a bad inspection.
For buyers, the biggest surprise is that the “seller” often doesn’t behave like a seller at all. They behave like a risk committee.

Opportunity—and Real Risk—for Buyers and Investors

REO properties can still present value, largely because many are sold as-is and can require meaningful rehab—conditions that reduce the buyer pool.
But the risks are not theoretical:
  • deferred maintenance and hidden damage
  • tighter financing constraints for properties that don’t meet condition standards
  • title or occupancy complications that slow closings
Experienced investors underwrite REOs as projects, not just purchases—budgeting conservatively for repairs, timelines, and contingencies.

Where We Fit—and How We Help

If you’re approaching REOs as a buyer, investor, or institution, you want two things: clear-eyed underwriting and clean execution.
That’s what we provide:
  • REO opportunity sourcing and screening
  • pricing and ROI analysis grounded in local comps and repair realities
  • transaction management aligned with lender requirements
  • due diligence coordination to surface issues early (not at the closing table)