I guess it depends on why you want the M1917.
If for a shooter--or perhaps, the ultimate "perfect packing pistol" (see the PPP thread on this forum) or a defensive revolver a buffed and reblued mechanically excellent M1917 fro $400 would be hard to beat. Change out the grips for some Packys or Hogues and you have a great usable .45 ACP revolver for a lot less cash than a 625, which go for about twice the price new. Also- you still get use the best speed loader ever developed for a revolver--the half or full moon clip.
Don't discount that the barrel may have been replaced after the M1917 was "mustered out." Particularly if the rest of the gun is mechanically excellent, someone may replaced the barrel and had a smith rebuild the action somewhere along the way. Many M1917 barrels are pitted from the corrosive primers used until the 1950a and a lack of immediate cleaing. Numrich lists a replacement barrel, but indicates they are sold out. But if the barrel is unpitted, the lock up is tight, and the gap is within spec- I'd personally grab it in a heartbeat at that price. But, I personally value good shooters over pristine finishes.
However, if you want a collector, you can probably find an original finish, very good condition M1917 for around double the money. That will take some searching as WWI stuff is becoming "collectible" now with the 100th anniversary around the corner, but the searching can be fun by itself.
My M1917 is probably typical as it is between a shooter and collector. It has all the original parts by serial number except for the sideplate, and all correct marks, but was reblued. The rebluing was nicely done, but you can still tell. I gave about what your seller is asking. Mine was made in May 1918 and seen its share of use so there is mechanical wear. It's not the most accurate revolver I have but it is still reliable. And, it is just fun to shoot!
Most M1917s aren't perfect, not many 95 year old mulsurps are. Each one has a history. Some have more history than others.
