Brian Quigley has an interesting article detailing 5 tips in buying a Bank REO.
(link to Brian’s bio/information at: http://ezinearticles.com/?expert=Brian_Quigley)

First, REO stand for Real Estate Owned.
Banks refer to their foreclosed property as: OREO – Other Real Estate Owned.

Tip #1 get pre-qualified
Tip #2 receive daily and weekly MLS lists
Tip #3 be prepared to make a solid offer
Tip #4 be aware of cash investors as property drops on asking price
Tip #5 have the bank pay for all closing costs and minor fix-up costs

For full explanation and detail of these five REO purchase tips, link to:
http://ezinearticles.com/?5-Tips-in-Buying-a-Bank-Owned-REO&id=1725214