Looks like it has the potential to be a decent bike. I would take a quick look at all of the models to be sure of which one you are getting. I think $700 is a fair price for the lower end models, which still have decent components. It probably wouldn't hurt to see if you could get him down in price just a bit if it is one of the lower end bikes, but I would dare to say it is worth $700.

FWIW, I just sold a Trek 4500 for $140. It was used, but in perfect mechanical condition with good tires. Deals can be had if you aren't overly picky and are just starting out with a potential plan to replace the bike once you know exactly what you want. As I'm sure you know, improper frame sizing can ruin your experience.