Your options will be determined by how your contract was written. If you want out, you have to use one to the escape clauses provided by the contract. If it states 'time is of the essence' then you may be entitled to some compensation.
Have your lawyer advise you on what your options are. That's what you pay him/her for.

Hi Jimmy!

REO is Real Estate Owned which is a corporate/bank owned property. At this point, contact your attorney and discuss this with them, as I would imgine they are aware. They should know what the issue is...if any.

Good luck!