You may get more cash for the engine if sold as working or recon.
Just make sure that when you go there you tell him that you are bringing in a fair bit of scrap steel, aluminium and copper. Minus his processing costs he should give you about £200 for it all.
If you have removed all the coolant, glass, rubber and plastics etc.. and just left him with metal, the less work for him, more cash for you.
He then bales up all his metal and sells it direct to a recycling mill.