JC,
You present yourself as a stronger buyer with the more money that you have down. So, if you can put down %25 then you will be looked upon by the seller(the Bank in an REO listing)as less of a risk. Usually, in an REO sale the bank looks at what the bottom line is first, but they also want to make sure the sale closes and they get the property off their books. So if there are multiple offers on the property that are pretty close, it will definitely make your offer look stronger(lower risk) even if the bottom line of your offer is a little lower than your competition that doesn’t have as much cash down.
