CHECK THE AIR CONDITIONING
W124s are prone to leaky evaporators. Replcament involves disassembling the entire dash of the car, plus a $300 part ($900 if you have a shop or dealer do it). This is approximately 18 HOURS of labor. Total price is around $2500-$3000.
Make sure that the A/C works!!! The A/C worked on my E420 when i bought it 4 months ago - but died about 1 month later. Now I'm stuck with this massive repair cost. I'm thinking about just bearing the heat - but summer in D.C. can be brutal.
I'd try and work the guy down on the price, given the mileage. If he really wants to sell, then he'd probably accept less now than the possibility of a bit more $ later. Cars with high mileage can sit for quite a while without selling.