I agree, I think $200 for a bare block that needs a sleeve is HIGH. If it needs a sleeve due to a violent death then be very careful, it may have other things wrong with it. If you buy it I would do this : make the current owner take it to a machine shop and have the block checked, if it's ok other than the sleeve you pay the fee, if it's bad let him pay the fee. If you buy it it is money you would have spent anyway, if he refuses the deal that may tell you something about him or the block.
FYI - Around here you can get a complete motor for $600 - $800. Personally, I'd wait and put a little more money with the $200 and get something in better shape.