it is a used car. Its up to the buyer to have it inspected. Seller does not have to disclose problems. Thats up to the buyer to discover. He should have brought it to his machanic to have it looked at and checked for problems when negotiating the deal. If problems were discovered then, he could ask for a price break or walk away. At this point its yours, you made the agreement and are obligated to stick with it.
It may smoke for years to come and not have issues.
You said it smoked when started? maybe after its warmed up the valves seal better?
$300 off is a fair offer at this point of the deal.