Bank owned property is commonly known in the industry as a “REO” or Real Estate Owned property. These properties have gone through the foreclosure process and have not been purchased by a third party.
The property “reverts” back to the lender and the previous owner has lost all ownership rights to the property.
Often times the property sits for a period of time while the bank puts it into their system and decides when to sell it, generally using the Multiple Listing Service (MLS).
For more detailed information link to EDUCATION article on Bank Owned