It can take 60 days to close and the seller does not want to loose this time if you are unqulaified to get a mortgage.
The answer is yes, that's very normal. It's one of the many hoops you may be asked to jump through when you want to buy a bank-owned property. The banks look most favorably at cash purchases, but if you don't have all cash, they want a high degree of assurance that the transaction is going to close. That's why they want offers from buyers who are already approved and ready to go. It means one less reason the transaction might fall apart.
Although it might seem intrusive or demanding to you, it's really in your best interest, as well. You'll feel a lot better about your offer when you know that there aren't going to be any problems with your loan. And believe me, in today's lending environment, even many people who think there's absolutely no problem for them to get the loan they want get blind-sided by unforeseen home loan problems.
Make sure you get a good lender, meaning a good rep. Get some recommendations from people with actual experience with that loan rep. If you don't, you may regret it.
By the way, good for you to be buying now. Those who wait are likely to look back and kick themselves for waiting around during this time. Best of luck to you.
Keller Williams Realty
Pre-qualification letters are not worth the paper they are written on. More often than not, the loan officer has not verified the buyer's debts, assets, pay stubs, or tax returns.
Best of luck to you!