a bit pricey for the motor... i've seen used 8hp motors for $60 on craigslist. bought brand new 8hp Kawasaki for $100 and a 9.5hp Kawasaki for $150.
as for the kart, let the guy know that it still needs several parts for it to be complete, and offer him $50. make a list of what it needs and price it out so yo know what you're getting into.