For the motor:
1. Take it to a certified marine mechanic that doesn't know the current owner of the boat.
2. Make sure that you are with the mechanic when it is tested in the water, have it pressure tested at the head and lower unit - especially if the prop is damaged.
3. Open the engine cover and check to see whether or not there is paint missing off any major screw assemblies (of so ask the current owner what work was done to the engine in the past)
For the boat:
1. Check the transom and under hull for cracks/damage, and/or loose rivets (for aluminum)
2. Check steering assembly and throttle - two places where damages can be costly
3. Make sure the boat and motor have clear serial numbers and that it isn't stolen! (check through local ministry of transport)
4. If the boat comes with a trailer, make sure the trailer is road worthy (tires, licenced, electrical, etc...)