Does the owner live in the area of his rental house? If so, I would push for him to meet me for a walk-through of the house when you arrive, so you and he both see what is nicked, chipped, stained etc. before you take possession of the house -- kind of like walking around a rental car with a rental agent before you drive it off the lot, so an existing issue is noted as already present and they can't say later that you caused it.
If he doesn't live close enough to do that, absolutely take plenty of photos, write down any issues you find (including whether appliances work) and contact him the same day you arrive to let him know of existing issues so they are not chalked up to you. I'd send him any images of damage immediately, that first day, and note that you are putting him on alert that this was existing damage before you arrived.
From a post below it seems that this really is a problem with this vacation rental web site, and it's good that the owner refunded money without a fuss (though I would be antsy until it turned up as credited back to my card, frankly). But I would be very leery about using that site again. Later, If you like the house and find the owner is cooperative, you might do him a favor by letting him know that he would do well to find another way to rent out his property that is easier for the renter, tells people ALL fees up front and doesn't create issues of collecting, then refunding money.
I hate hidden costs. He is blaming the site and it does sound like the site is an issue, but the end result for you as the consumer is that there were hidden costs and hassles. Leaves a bad taste.