Home loan pre-approval: your key to a successful negotiation

Securing a home loan pre-approval provides you with a commitment from the bank or lender of your choice as to how much you can borrow before you buy, with a formal, written home loan pre-approval.

An official conditional pre-approval isn’t just an ‘indication’ of how much you can borrow it is a real commitment from your lender as to how much they are willing to lend you, and it may speed up the final approval process when you do find the right property.

You’ll know exactly how much money you have to negotiate with and can comfortably sign a contract or bid at auction, under similar conditions as a cash contract. This can also work in your favour if you are up against rival buyers considering the same property.

If you’ve done your research, got your finance sorted and decided on a property to invest in then now could be the time to make an offer. With that being said, let’s get your negotiating and bidding skills in check so you’re ready to go sooner rather than later.

Making an offer on a house

Now that you have a clear idea of your price range (upper and lower limits) you can begin the important process of price negotiation.

For example, you could start with a slightly lower price than your upper limit, which leaves you with a little more room for negotiation. However, you don’t want to make an offer that is so low that you’re effectively shut out of the market.

I’m happy to work through a plan with you in a little more detail to see what will work best for your situation.

Negotiation is an art

Negotiation is a crucial part of the buying process, one that could decide between a profitable price and a considerable loss in comparison with the market price of the property.

You could invariably expect the seller to push your offer as high as possible in an effort to squeeze every cent out of your budget, and possibly stretch it even further.

You would end up revealing the upper limit of your bargaining price if you were to respond to every nudge and call from the seller. Keep your cards close to your chest and abstain from revealing your final offer.

The auction process

An auction can often be unnerving even for the most confident bidders – to bid in an anxious crowd and put up a claim to the property that you like may seem like a never-ending moment.

Nevertheless, auction is a reality in the life of a buyer, and when it comes to the day, you need to be as prepared as possible.

How to bid at an auction

Auctions are conducted in strict accordance with the provisions of law, and it is important to know the legal processes and requirements involved. The auctioneer makes one bid on behalf of the seller, and prospective buyers take it up from there.

You could also make an offer prior to the commencement of the auction, but you stand the risk of overpaying if you do so. State laws on the bidding process could vary, and it is important to do your research before arriving at the auction.

Visiting multiple properties before bidding in an auction, and also visiting a few auctions, would give you a fair idea of what to look forward to in a property auction.

If you turn out to be the highest bidder of the property, you will need to pay the deposit and sign the contract then and there. The standard deposit is 10% on fall of the hammer. Auction purchases do not feature cooling-off periods, so it is critical that you are sure about your offer price before making the bid. (Again, just another reason to engage your mortgage broker nice and early and get the pre-approval sorted.)

You’ve got this! (With a little help from your friends.)

If you’re looking to buy a home, make the right call and get a mortgage broker like me working for you as early as you can. Not only can I assist you with the ever-important finance piece but I can guide you through the process whether you are bidding at auction or negotiating through a best offers process.

If you’d like to know more about your home loan options from a range of lenders, an overview of costs and repayment options or to organise your own home loan pre-approval, please get in touch today. Feel free to text or call me on 0402 023 693 or click on the button below to request a call back.

Published: 15/09/23


THE FINEPRINT: The information provided on this site is on the understanding that it is for illustrative and discussion purposes only. While all care and attention are taken in its preparation any party seeking to rely on its content or otherwise should make their own enquiries and research to ensure its relevance to your specific personal and business requirements and circumstances.

Green Finance Group Pty Ltd ACN 145 035 221 is authorised under LMG Broker Services Pty Ltd ACN 632 405 504 Australian Credit Licence 517192.

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Meet the Author

I’m an ex-banker and have been working independently as a finance broker for over a decade. My career experience in banking and finance is extensive and includes all aspects of home, personal and small business lending.

Karen Donato

Finance Consultant - CAIRNS


With access to over 60 lenders and hundreds of home loan products I can provide you with the choice you need to negotiate a better deal on your home, investment, or business loans. Currently assisting clients based in Edge Hill, Edmonton, Bayview, Earlville, Cairns City and surrounding suburbs.

"I’ve been helping local Cairns families and borrowers to get a better deal on their home, investment, car and personal loans for over 20 years. I know exactly what it takes to make the process as hassle-free as possible.”