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If it was legal when it was built, it is normally legal to sell that way. There are exceptions, but in general it is legal.
However is it advisable? In Minnesota there are many homes with 4 inch walls. Today 6 inch is the minimun legal amount for new construction.
Me? I'd want the most insulation I can get, and 3 inch walls will give me higher heating bills. However it isn't that easy. Some foam insulation is better then normal insulation by enough that your walls could be better then a normal 5 inch wall. (Is there was a 5 inch wall) So find out how it is insulated, it could be good enough from that stand point.
Beware that with a non standard size you will have problems if you want to replace windows or doors - nothing off the shelf will fit.
If I could find anouther house that was similear, but with thicker walls, I'd take the one with thicker walls. If there was something unique about that house I'd consider it though. Avoid it if you can.
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