Give him $500 with the agreement that you will be back with $500 more if they check out. If they dont. agree that you will bring back for $500. He gets two checked out motors for free. You are honest. He knows it. He is honest. fair deal.
I'm not trying to be a dick here but have you checked into the cost of disassembling a motor by a reputable shop, having magnafluxing and sonic testing done and checking bearings, cylinder bores etc.. I don't know about US pricing but in my part of the world you are paying 100 +per hour for that kind of service. so lets be conservative and say 4-5 hours to do all these checks. That's $500 there with no guarantee that the most critical parts are any good. You take all the risk, the seller takes none and either way it costs you $500.00. If the seller wants a good price for what should be a very salable item, he should ensure the validity of the item he is selling.