It depends on the lender’s performance and their relationship with their respective regulatory agencies. If they have a good (in terms of safe/secure) track record the feds won’t lean on them too badly to dump their REO properties under liquidation conditions. If they’ve been having problems or they have a lot of foreclosures coming up, the feds will force them to sell ASAP. Selling under those conditions means the price will be discounted as much as it takes to move the unit in 60 days or less.
Putting the phrase “Bank Owned Foreclosure” in an MLS listing is a guaranteed way to generate lowball offers below whatever the low point of the market is at that time. Just as when the market’s hot and buyers will pay anything to get in, when the market is in decline some sellers will do anything to get out.