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I agree, if the owners don't have the papers in hand and in order, it's a grade horse. If they tell you it can be easily done, then let them do it before any money changes hands. I want to see the papers myself on any horse before I buy it.
I was upset, believe me. The horse I bought has such cool papers too, tracing back to Man O War on one side, the foundation quarter horses on the other, and a bit of Impressive(what doesn't nowadays). But I was not going to pay $1200 for papers, just to have the horse gelded later. I wish I had the papers in hand just to show off the history in his blood and it would have only cost his breeder $25 to do it when he was born. It was pure laziness on her part and it irks me to this day. A terrible buying experience and one that I will not forget.