Supersports can be a funny bike to buy and sell. Chances are if he paid a $1000, it is a $1000 bike - but considering you are in the northeast $1500 is about the going rate for just about any SOHC that you can ride that same day. The NADA guide and Kelly BlueBook figure $1500 for a pristine condition bike and about $900 for one ins ok shape so if you offered him say $1200 you'd be in the range of a fair price. The exhaust may be a problem since good condition supersport pipes are hard to come by. The faded paint sucks because paint is usually the most expensive thing on a bike if done by a professional, next to an engine rebuild.
There are a few questions you need to ask yourself before you buy:
1) Am I looking for a Supersport (or SOHC for that matter)?
if the answer is yes, that you set out to look for this bike and found one then that weighs heavily for buying it. Even if it isn't a great deal now these bikes will only appreciate and will become a great deal later on. I paid $800 for my 1975 CB750K in 2000 at a time when most people told me I overpaid by $300. Now it is 5 years later I have had a ton of fun with the bike and the last three times I took it out somebody offered me $2000 for it.
2) Am I mechanically competent to fix this bike myself?
IF the work in needs is minor and you are a good mechanic then by all means go for it. If the work is minor and you don;t like wrenching it still may be a good deal if you have to pay a shop to do it. If the thing has an engine tick and you are a good mehcanic but have never rebuilt an engine before - $1500 is no bargain for you. Remember bargains depend as much on the situation of the individual as they do on the actual price. Evaluate yourself and the bike when thinking about how much repair it would need for you to be happy with it. Always figure out how much it needs and how much that will cost.
3) What do I want to do with this bike?
If you intent is to ride the sucker till the tires fall off and you can live with a few imperfections like faded paint and a rusty bolt or two then this bike may be a good deal for you (if it is ready to ride, and you can handle a lot os small weekend on projects to get her looking better). If you want to do a nut and bolt resto on this bike this bike may be too expensive a canidate since it's purchase price is pretty close to the book value for a pristine one (keep in mind that in the NE the market price is higher than the book price). MY father is the kind of guy that needs to have every bike he rides be perfect, so he and I restored a $360 1979 DOHC supersport for him to ride. All said and done we have $2500 in the bike (counting purchase price) which is about the limit of a good condition one. I have about $1500 all said and done parts and purchase price for my 1975 cb750 K ($800 initial purchase) and it looks alright and I get way more use out of it than my pop does out of his 79. Plus I didn't have to wait 6 months to ride it.
Personally I would buy it, but then again I buy every SOHC 750 that run into and can afford. Would I buy this bike for that price - yes I would because I like to ride bikes and I can live with faded paint. Plus I am mechanically capable and would over time clean up the bike cosemetically (it helps that I have a blasting cabinet and access to a good painter). Since you asked from a value perspective this is my evlauation - hope it has been helpful.
I would ask where it is if you pass but I don't have $1500 to dump on a bike right now.
