Hi Dan, the CO to close is likely an inspection by the township's fire prevention dept and includes a review of equipment, placement and functionality of smoke and carbon monoxide detectors and fire extinguisher. The township website will provide details on what the CO inspection involves for that particular town and the process to schedule. It generally involves a nominal fee and someone needs to be in the house at the time of the inspection. You are wise to test everything that will be inspected because if you fail the inspection then you have to reschedule, incurring a second fee and possibly causing a delay.
If the property requires repairs in order for you to secure your financing, then that is another matter. FHA financing may require that. But as the prior poster mentioned, there is also a rehab loan and that is a bit more involved - estimating the value of the property with upgrades so that you can finance the improvements.
The bottom line is this - what you are facing is new to you, but not uncommon. What I recommend is that you work with an experienced agent and lender - plus the best attorney and inspetors you can find. Your agent, and attorney will be able to guide you through these steps
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