I hate those rebuild deals, you never know the quality of work that went into the rebuild, especially if its only got 5 hours on the rebuild. I'm a little sceptical when a rebuild comes for sale shortly after its been rebuilt, if the guy knows he is selling right after the rebuild there is a good chance he didn't use good quality parts or workmanship and it could still grenade on you.
At this time of year figure out a fair price and then deduct the cost of a rebuild and offer him that. that way your covered.
If he can prove what all went in the motor and it was done right, that's a different story.
Just my opinion.