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Did the paperwork for the transaction state no smog certificate to be provided by the seller? If not, the seller is responsible for it, which should just mean he reimburses the buyer (if he asks). This can come back to bite your BIL if the buyer takes his sweet time and then the car does not pass smog. A smart buyer could make this issue a headache for your BIL.
How much of a discount does the buyer want? If it's cheap enough, he should consider giving back some money and getting an agreement on the smog.
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