Communication, and honesty is the best policy in this case.
You will have to settle for a lower price either way because of the defect, because he will find out about it sooner or later. Be clear and open about it, ask him if he still wants it despite the defect, and above all, offer to fix it, emphasis on "offer". That shows that you recognise the defect and that you're willing to remedy it for him which will earn you brownie points for future sales.
Here are some personal experiences of mine:
+ I once bought a PCC Salvage from a fellow member, with a very loose elbow joint. He told me that in advance, so I knew what I was getting into, and I was perfectly fine with it as I can easily fix it.
- In the very beginning of my collecting days, I bought a second-hand G1 Rocket Base with Countdown. Noticed it was incomplete (white robotic claw was missing), so we punched the original selling price down. Much later on, I noticed that the blue scout vehicle had one of its pegs broken off and glued back on. Not something I wanted to see, but to be expected with a toy that old.
- I traded a figure (I believe it was United Scrap Iron?) for a TakaraTomy Camaro Concept Bumblebee and a loose Classics Cliffjumper years back. He's a kitbasher and didn't have any real plans for ol'Cliffy despite having taken him apart. Fine, he was put back together, trading was done, all fine and dandy. A few months later, his hitch broke off, and it wasn't the first time as I saw glue residue on the break. I'll have to hunt for a junker and pray I can learn how to knock out pins, even then it's a doozy consider how integrated the backpack is.