You have a few options. Whether or not you go with this boat, you should advise the owner and his broker of all defects detected by the surveyor. Once the owner and broker have this info they are required to share it with any other potential buyer should you not make the deal.
Now having shared this info you are in a position to make an offer on the boat. I would make an offer based on his repairing the wet areas on the boat. I'd get an estimate to replace all running rigging and offer to split that amount with him. As a concession, you replace all the sails.
Now having shared this info you are in a position to make an offer on the boat. I would make an offer based on his repairing the wet areas on the boat. I'd get an estimate to replace all running rigging and offer to split that amount with him. As a concession, you replace all the sails.