Basement lower than 7ft buy or no-buy

[Jordan Yefriadi]

I’m in the process of closing 4bd 3ba, the 1bd being finished basement. Everything is good by inspections and appraisal guy. Except that the electrical required some fixing, so owner fixed it and another inspector from the county came in to check, they okayed the electrical but put a correction order and prohibited occupancy due to ceiling height is less than 7ft.

Owner lived there for 10 some years and nobody says anything about basement ceiling being out of code.

Should I bail or stay?

House was appraised for $340k, I got it at $320k. Comps in the area is around $350k.