[turbo6bar]

Bank is bluffing or listing agent/broker is doing so by proxy. If you are indeed working with a listing agent instead of listing broker, he likely has not even two quarters to rub together. If he's a player in real estate, he would not be talking. He'd be doing.

Your friend must decide if he really wants this house. If the house doesn't need work, and truly is 25% under current market, he could raise his offer. On the other hand, if he is not emotionally attached to the house or the deal, he could sit and wait, or make another lowball offer, knowing he may have to move on.

It's good to know what your counterparty wants, but in this case, it's nearly impossible. Banks are flippant and irrational. Don't dwell on their motivations and intent. It would be like trying to understand women.