Preapprovals as rare as hen's teeth...
The best thing you can before you decide to stick your hand up at auction or sign a contract of any description is to have your preapproval fully assessed with a bank.
But what do you do when fewer and fewer banks in the current market are preapproving applications? How do you go into an auction with peace of mind?
The truth is there is no easy answer right now. There are only a limited number of banks which are still assessing preapprovals and of those that do their turn around times can range anywhere from 10-14 working days to 28 days just to pick up your application and begin assessing.
What? Yes you heard correctly, It could be anywhere from two weeks to four weeks for a bank that is still assessing preapprovals to pick up your application. It's a long time and means that your choice of bank will be directed towards a specific handful of lenders.
If you do have time on your side and you do not have a looming deadline for an auction, you may decide to have your broker put your preapproval up to a bank which is still assessing loan applications, regardless of how long this takes. Then ultimately you will have peace of mind when you go to an auction and bid, as you'll know exactly how high you can go based upon the amount for which you have been preapproved.
Alternatively, you can try for a private sale. As fewer properties in many Melbourne suburbs seem to be going for private sale, this could meaning doing the hard yards and searching for those that are (perhaps in areas you have not considered) or gauging whether a property you are interested in is accepting offers prior to auction.
If either of these situations can apply, it's then deciding what you can do to make your offer the most attractive, while still including your 'get out' clauses if things fall down when your loan is assessed or if the valuation falls short.
Thirdly, you could work with your broker to get an approval in principle. Some banks are completing partial assessment of loans which may give you some peace of mind even if your loan is not assessed in full. This is where your broker's knowledge of your situation and which lenders are doing what is absolutely key.
In a world where preapprovals seem more and more rare rather than common place, it has never been more important to have your situation analysed by a broker and for them to guide you about what you should do. Your broker may have more grey hairs than when you last saw them, but we are across everything that is going on. At least that can work to your advantage.