If the surveyor says it has a fair market value of $7,800 and your offer was $12,000... you're paying way too much.
I doubt that the seller will be very happy if you drop your offer by 30%, considering that most of the survey results are relatively inexpensive repairs.
Propane heater removal, upgraded hose, propane solenoid installation are really all one issue. You can do it... or pay someone to install all of it, but it isn't all that expensive over all.
Batteries should probably be properly secured in a battery box with a lid. Cost of new batteries and proper battery box depends on the number of batteries and size.
Fire extinguishers and flares are just USCG safety items and you should probably get new when you buy a boat... don't trust the PO to have maintained them. SOLAS grade offshore kit
is $280. I don't recommend getting the USCG, since the SOLAS flares are significantly better. Small set of fire extinguishers is probably $50 or so.
VHF radio... get a DSC-ready one. A decent one is about $270 for a really nice Icom M504 with fog and hailer. New antenna is about $45 or so.
Navigation lights... get LED-based ones...they're a bit more expensive, but they'll be cheaper in the long run and lower maintenance. A tricolor/anchor light is $350, bicolor and stern light is probably $650 for the two lights.