If it is worth $500 to you, then buy it. If it isn't, then offer him whatever it is worth to you and leave it at that and look elsewhere. Unless it is a 4 door (with 5.38 gears) then it wouldn't be worth that to me.
Sounds like a fair price too me.
Or you could try another method; buy it for a fair price for what it is, then piss and moan and crybaby until he gives the money back or even pays you to fix it! 
Haha, you're funny. I can't help it if you are too stupid to know the condition of the stuff you are selling.
