She may not be lying, she might just not be fully informed on the issue. I wouldn't assume the worst of her right off the bat.
I wouldn't do it, not with horses or with goats. The reason why: it is genetic and can be passed to his sons (and without knowing the genetic way it is passed who knows, it could travel down to it's daughter's kids) leaving me with possibly having a bunch of little boy goats who either can't be properly castrated OR would be very expensive to castrate. This makes them horrible pets, or expensive pets. Either way it pretty much dooms them to being used for meat or living a miserable life. I wouldn't pay for a buck with only one dropped testicle, no matter how much i liked him. I would personally pass, and keep looking for a buck I liked just as much who had all his equipment present and accounted for.
It isn't about whether or not he is fertile, it is about whether or not he could pass something on to his kids that makes them significantly less desirable to buyers and more likely to end up in a bad situation due to behaviour issues.