After having an offer of £18 million cash plus Julio Baptista turned down, Real are receiving better encouragement with their new bid.
Real are offering £22 million cash plus a choice of Esteban Granero or Ruben de la Red in exchange for Villa, who has already informed friends he's keen on a move to Madrid.
The one stumbling block could be Real captain Raul, who may push to block the deal as Villa would be a clear threat to his first team place next season.