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If I have a home loan preapproval letter for x, can the seller know this without me explicitely telling them?
The seller has a legitimate desire to know of your preapproval. I have two current anecdotes on this issue. As a realtor helping a client buy a home, I worked closely with buyer's bank, and got a pre-approval for the amount we were offering. When there was a counteroffer, and we were going to raise the price, the bank upped the numbers on the pre-approval letter.  I have a property of my own I am trying to sell. I had a negotiated price, P&S, but no pre-approval from the buyer. The buyer of his home couldn't get a mortgage, and so far, the deal has fallen through.  I agree with you, you don't want to signal you can afford more, nor show any emotion about how great that house is. That's just giving the seller a bargaining chip.