The 3 3 3 rule in real estate is a financial checklist that is used to ensure that a buyer of real estate is financially and strategically ready to purchase a property.
When it comes to the 3-3-3 rule in real estate it states that the buyer of real estate should.
Save 3 months of living expenses, by maintaining a robust emergency fund in case of job loss or any unexpected emergencies.
Keep 3 months of mortgage reserves, by having cash set aside specifically to cover your mortgage payments for at least 3 months.
Compare 3 properties, by researching and evaluating at least 3 similar properties before you make an offer to avoid overpaying.
There's also another alternative "Rule of 3" in real estate.
The Rule of 3 is also known as the 30/30/3 rule and is often used for affordability, and the rule states that you should spend no more than 30 percent of your gross income on housing and have 30 percent of the home's value saved for a down payment and reserves and keep the total purchase price under 3x your annual income.
There's also the 3 year rule for selling, where some professionals suggest that you should plan to own a home for at least 3 years before you sell the home to ensure that you build up enough equity to cover the buying and selling costs.
And even the 3 year rule for evaluating, which is used by investors, and means that you should look past price trends in the locality for 3 years, checking the upcoming infrastructure for the next 3 years and compare it against 3 similar properties that are nearby.