How do Buddhists express condolences?
Here in Sri Lanka, we typically say "Anicca Vata Sankhara" or "Vaya-dhamma Sankhara" in the bereavement notices. When you meet the family members, you put your hands together and greet without smiling. You are not expected to say anything unless you are giving an eulogy. When you talk to people, you are expected to talk quietly and not to gossip. You can either inquire about funeral arrangements or engage in a Dhamma discussion.

I suppose in the West, it's customary to say something. So you can probably say "May he/she attain Nibbana soon!"