I can’t answer for embassies in every country but I applied from India and didn’t book anything before applying, just mentioned a hotel I “intend” to stay at during my application process.

They asked me for additional documents which was proof of accommodation, at which point I booked a hotel for 1 month from Agoda using the “book now pay later” option. Sent them the booking confirmation receipt I got from Agoda. Along with this, I attached an “explanation note” which stated that this would be my base accommodation for the first month while I look for long term rentals as I didn’t wanna book a long term condo without physically checking it out.

I got approved the same day. If I have to be honest, I personally think I wouldn’t have had an issue getting approved even showing a booking for like a week, but since it was a refundable/pay later booking I had nothing to lose, so just went ahead with the 1 month booking.