Double and triple check the value of the real estate, as that makes up 2/3 of the sales price.
Now, to evaluate the business, back out the value of the real estate. So, you're paying $200,000 for a business that brings $120,000, with the caveat that you have to carry the note for $400k at the same time. Not too bad, so far. Can you verify the $120k? By verify I mean tax returns.
If it's not in the tax returns, then it didn't happen.