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You get a level 3 house, by going to the workshop, talk to Woody, to see what level are
avaible for you to buy, it will say how much money it requires and wood, price varies on
style of house, once you know how much money you need and wood, save ur money raise your
profits, and use your axe located in the chest in ur house, to get the axe, and cut down,
branches around the town, the forests near the moutains contain lots of wood, if that
didn't help, then you probably didn't upgrade your level 1 house to a level 2, to go on
toward a level 3.

ooh I have no idea

all you have to do is befriend any 1 of the 3 guys who work in the worksop get 1 heat on
any of them and a level 3 house will be unlocked

Make sure you have at least 1 heart with Woody, Joe, or Kurt this will unlock the level
three house.

P.S
If you want to marry her/him you have to by a dubble bed first