No, there is no legal requirement for you to have final approval on a loan before making an offer to purchase real estate. It can certainly strengthen your position if you do, but it is not necessary, and most buyers do not take this step before submitting an offer.
Instead, two other types of approval may be used.
Prequalification for a loan
In some cases, buyers will simply report their own income levels or debt levels to a lender, and they can receive prequalification based on the information they provide. This may give them an estimated price range.
If someone is looking to buy a home and has prequalification for up to $300,000, for example, it helps them know what homes to focus on during their search.
Preapproval for a mortgage
Another option is to get preapproval from a lender. This is a more detailed process in which the lender conducts a deeper review and requires more paperwork. The buyer is not just claiming to earn a certain amount, but must provide documentation and proof of their financial situation.
Preapproval letters are very common with real estate purchase offers. They generally create a stronger offer because financing is much more likely to be approved than if someone submits an offer without even speaking to a financial institution.
Navigating real estate transactions
Final approval on a mortgage loan will likely not come until much later in the process, perhaps after steps such as the home appraisal and inspections have been completed. Throughout these stages, both buyers and sellers need to understand the legal intricacies involved in a real estate transaction. Legal guidance can often help both parties avoid serious mistakes.