I don't think that is a bad deal for all of the parts they would be getting. But I agree with the others, it's a core and should be sold as such.
Last spring, I bought a "low mileage, full roller MP 300hp crate motor" off of Craigslist for $400. The guy gave me a written guarantee that it was a "kick *** little hot rod motor". When I tore it down, it had a ring ridge that you could trip over, NO ROLLER parts at all, and the aluminum M1 intake had rotted out from the inside!!! Was I upset? Not really, because I knew I was buying a core. Had I been expecting to drop the engine in and go, yes. As it worked out, I parted everything out and kept the 91 roller block for free.
I wouldn't recommend selling the combo as a drop in and go piece. Especially if he is a member here and could possibly come back and turn this into a pissing match.