If you need an engine, its a great price, espically if there are lots of other parts. You can run the engine and if it starts easy and sounds ok, it should be fine. you could do a compression test but I would just offer him (with cash in hand) less, assuming its ok. He probably just wants it gone and if he wont take less, its still a good deal.

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1985 Euro 240D 5 spd 140K
1979 240D 5 spd, 40K on engine rebuild
1994 Dodge/Cummins, 5 spd, 121K
1964 Allice Chalmers D15 tractor
2014 Kubota L3800 tractor
1964 VW bug

"Lifes too short to drive a boring car"