Re: Waterpump seal?
From your description, no one can really say if the engine is a good deal. We are not there to assess the overall condition. How does the engine generally look--clean or corroded? Does it have good compression? Is the inside of the cowl coated with oil, showing hard running or does it look like new? These are all questions that only you can answer. Still, you need to assume the worst. After all, it is sold as is and in this world it is buyer beware.
REMEMBER: Every engine sold is in running condition or was when it was stored, and every engine has only minor problems---until you get it home.
The seal, if it is in the water pump itself, is relativly inexpensive and easy to replace. HOWEVER: If the seal is the one below the water pump it will have leaked water into the lower unit and repairs COULD get expensive even though the seal itself is not.
If I were selling the same engine, I would be asking between 1000 and 1500, BUT, that is for an engine in perfect running condition, includes a new impeller and lower unit oil, mounting the engine on the boat, controls, a test run with the buyer, and my word that if anything mechanical breaks in the first season NOT DUE TO HIS NEGLIGENCE, I will make it right.
Personally, given that the owner is telling you there is a problem, I think 750 is too much. MAYBE, maybe if the engine is otherwise in good condition and shows some care and preventive maintenance, maybe 500 would be a fair price.
Interesting anecdote relating to the second paragraph. I had a fellow come to me with his Tower of Power 6 cylinder Mercury. When he stored it last season, it was in running condition. I know because I tried to ski behind it. When he brought it to me this year, it was seized. So, it does happen.