There are several reasons for low compression. It could be nothing more than a head gasket, stuck rings, or something far more sinister. You might check it with a compression gauge to see just how low it is, but if the guy selling it is saying it's low it's probably very low.
At that price, imo, it's worth the gamble. If it's not an easy fix you could part it out and make money so long as the gearcase is good and the tilt/trim works. If it does turn out to be an easy fix that's a good engine.