Reasonable expenses might include the cost of the title examination, preparation of a survey, and attorney's fees.However, if the seller acted in bad faith, your state's law may allow additional money damages.

Raise it if it warrants with proper notice, maintain it if at all possible, do market surveys to make sure you are within your market price range.

What you can do is look at the weekly average rates survey from Freddie Mac, and and add 0.75% to 1.5% on top of those rates to get what the rate will be for an investment property instead of a owner occupant rate.  

Also if you think the property is located high enough, you can get an elevation survey done to try to get the house exempted from flood insurance.

What is the occupancy in that sub-market and what does your market survey say about the other comp properties?

I'd appreciate hearing back from anyone who can relay back whether or not the numbers are reasonable:Estimate of the costs to Seller:Title Policy $1750Transfer Taxes $600 (based on $130,000 purchase price)Survey $400Miscellaneous Title Costs $500 (recording fees, zoning , water cert etc.)Tax prorations and attorney fee of $500Estimate of the costs to Buyer (me):Loan Policy $500City Transfer Tax $1000 (based on $130,000 purchase price)Escrow Fee $1400Miscellaneous Title Fees $500 (Lender endorsements, recording fees etc).Inspection $450This doesn't include closing costs from the lender such as origination etc (lender is USAA)Any thoughts?

It may require getting a survey done to determine this (the current owner may have one). 

Have your agent check them as well- check to see if there is a survey of the property to determine the elevation of the lowest floor. 

Some of the things that have transpired to this point:1) Surveying of the property has already been done, however the site still needs to be cleared and prepared  for development.2) Property has already been zoned for R4 (high density residential)3) Sewage/ Potable water to the site is already prepared for multi-unit development.4) Blueprints have already been developed and reviewed by one of the top developers in the area.5) Investor is primed and ready to see a proposal of all costs (where I come in at).6) Owner is a contractor and wants to reserve some subcontracting roles for himself.Some of the things that I am struggling with up to point is how do I come up with the figures to bring to the investor?

Also, there is some potential issues with the property survey that show the current home's driveway on the neighbor's property.