Well, I can't say anything that hasn't been said before. Great bike at a terrific price. So who says how much an old bike is worth? Probably the seller is thinking to himself: "what a moron, he bought the bike without even haggling around the price..."
Yours is pretty much like mine, also a red K1, but as you say, your bars are higher. It's true that CB350's had higher bars in the US than in Europe, because that was like the american tastes were running after the chopper scene, but I don't think that CB750 ever came with those bars. BTW, it even looks like you have the original bridgestones on!
I paid 1500 bucks for mine three years ago. Funny thing is that I was looking the classifieds trying to find something interesting, specially a Z1. Saw the advertising, phoned the guy and couldn't believe it was a K1. As I know how this things go I confirmed with the guy I was the first caller so I told him to let me be the first to see the bike. He agreed, I was there after lunch the same day, was struck by the appearance of the bike, tried to start it to no avail and struck a deal but I didn't have enough cash with me to make a down payment. It was friday and we agreed I will pay and pick up on monday. You can't imagine my suffering during the weekend, as I thought that if the guy received a lot of phone calls he would change up his mind and rise the price. I called him on saturday just to let him know everything was ok and I would be paying on monday -I just wanted to get a hint about what was the situation with the seller. Fortunately, everything turned out well but mine didn't have title either and it took me more than a year to have all the paperwork sorted out.
Raul