Price reduction!
Lets say an airplane passes inspection with no problems and is worth $20,000 based on market trends. If the seller's asking price is more than that, it doesn't matter ... it's still only worth $20,000.
If that same plane doesn't pass inspection, is it still worth $20,000? No! It's worth $20,000 minus the actual cost of all repairs. If the repairs are going to cost $5,000, then the plane is only worth $15,000 as is. In this case, it would be silly to offer more than $15,000, regardless of asking price or the sellers wishes, especially if you want to have someone other than the seller (or his mechanic) do the repairs.
Everything is negotiable. You don't have to do anything you don't want to, or do it the way the seller wants. If you can't reach an agreement you can live with, all you can do is walk!
Here's an option maybe you both can live with. If the owner thinks he can save money by doing the repairs himself, or having his mechanic do them. Fine! (Yep! Let him do it!) But, (if he won't agree otherwise) only a small good faith deposit you're willing to loose if you decide against the purchase changes hands before final sale, and the sale is contingent upon everything passing you and your mechanics final inspection! Legal solution for both of you!