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Pre-approval gives buyers a clear understanding of their borrowing capacity and signals to sellers that they are serious and financially prepared. Lenders assess income, expenses, credit history and savings to determine a safe lending limit, but the approval is still conditional on final checks and property valuation. Although pre-approval is not a guaranteed loan, it significantly reduces the risk of finance falling through after a contract is signed. Buyers with pre-approval tend to act quickly and confidently, which benefits sellers by reducing uncertainty during negotiations. From a seller’s perspective, knowing which buyers are pre-approved helps your agent prioritise genuine prospects over casual browsers. A strong agent will verify pre-approval documentation, track buyer readiness and manage timeframes closely to avoid finance delays. Understanding pre-approval helps sellers see why financially prepared buyers often produce smoother, faster and more reliable sales.
A buyer attends your first open home and tells your agent they already have pre-approval for up to $950,000. Your agent requests a copy of the letter and confirms the expiry date and conditions with the buyer’s broker. Because the buyer is already financially prepared, they ask for a contract immediately and book a second private inspection. Within a few days, the buyer submits a strong offer because they know exactly what the bank is willing to lend. Your agent negotiates effectively and secures a price above expectations, thanks in part to the buyer’s confidence and ability to move quickly. The contract moves smoothly into the finance stage because most of the groundwork was completed during pre-approval.
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