James . . . my opinion, if a dealer will stand behind the merchandise . . . I wouldn't run, screaming, from this deal. While the price might appear a little on the high side, the integrity of a reputable dealership should be worth something.
A suggestion: Look the bike up in Kelley Blue Book (kbb.com); see what similar models are selling for in your zip code area. Guideline only, but . . . should let you know some approximate righteous pricing basis.
I'm not one for haggling; some won't consider an acquisition without thinking they've brought the seller to his knees; demanding a tribute of a lower price than asking. In my view, this is discretionary recreational purchasing; a few dollars one way or another are not critical.
What IS critical? Acquiring a bike you will love and enjoy. One that is misrepresented or unsatisfactory is no bargain at any price.
And, there's little at a stake here: You could probably realize close to the asking price by parting out the bike in question without ever even riding it for one wheel revolution.
I think the KLR would make an ideal stable-mate to your Buell; however . . . what YOU think is key. With your realistic expectations for a used bike of that age, I believe you could be very happy together; good luck!