As Kitchener says you can cut down your sim – we watched a shop do this with a custom clipper tool/pliers – this is best as it means it all should work perfectly with no porting over issues.
What you must check is how it was unlocked – backstreet job or proper code from O2 – ideally you would check it with another non-O2 Sim ideally from same provider as you are on )i.e. before chopping up yours !)
You might ask if/when the battery was changed – about £60 for a proper battery from Apple or DIY for £10
Screen protectors are good as they stop any scratches and make it less likely the screen gets broken if you drop it – personally I don’t like them and you should be able to remove it then clean up the screen if you wish.
Can’t comment on price, that depends a lot on how much memory it has. 16GB is just about workable, 32 up much better.
Make sure everything is up to date on the iCloud, all contacts saved, photos etc. As for testing just put a sim in it or use his (taking on trust it’s been unlocked), check screen works fine etc, check wifi works.