EVERYTHING is NEGOTIABLE!

Obviously this MUST be fixed

Is it a working chimney for a fireplace or just a furnace hot water
tank chimney. How old ios the home? All brick chimney or flue liner?
Did the contractor camera inspect the interior or just look from the
ground?

Try telling the seller you will split the cost of repairs..........

how is the general condition of the remainder of the home.

if they are motivated sellers they will likely split the cost of
repairs.