IDK...looks like it's priced about right, assuming the mileage is honest and it's titled, as described.
I do see some condition issues and some of them hint at additional items that might need work. WTF is that nastiness surrounding the VIN tag? If it's dirt, no big deal; if it's oxidation/rust, this puppy needs paint. Going by the condition of the VIN tag, rust seems unlikely but...that's the problem with minimal photo documentation. Both grip covers are missing the ends. Has the bike been dumped, at least once, on each side? If so, the signals may be damaged, along with the stalks & headlight ears. That'd also be consistent with what might be light road rash on muffler heat shield. Or, does the seller have a problem with a large, handlebar-gnawing rat? (in which case, new grip covers are cheap)
I see some rust on the shock springs, footrest assembly and handlebars. The seat cover has seen better days. None of these are really bad. However, I suspect that there's a fair bit of cosmetic restoration needed to return this bike to its former glory...and a complete, 425-mile original, really should be. Here's the caveat...it could take anywhere from $500-1500, possibly more to have a concours-quality bike.
`78 handlebars are rare, as is the correct speedo. Tail lights aren't getting any easier to find and the fork ring$ are chrome-plated, dieca$t, metal. Re-chroming handlebars is typically double the cost of a pair of new repops. The round speedometers are fiendishly difficult to redo correctly, translation: not earth shatteringly expensive but, substantial. Toss-in the engine & muffler guards, along with a set of fenders and there's close to $800 in chrome, if it all has pitting. That's a substantial "IF".
If one is aiming for perfection, the original hardware & fasteners will need to be re-plated in two, separate, batches
OTOH, reproduction seat covers, cables (if needed) and decals are available and cheap. The black-painted ("bean counter chrome") parts are relatively DIY-friendly and represent a big cost saving over, say, a K2-`76 model. If the frameset tins have rust raspberries erupting through the original paint, at least there's no worry on the color match...though a gloss black paint job is another kind of challenge for the body/paint restorer.
To be clear, this looks like rare find...especially for the `78 aficionado. If I wanted a 100-point `78 model, I would give this one serious consideration. The point is that I'd go in expecting a bike that's worth close to the asking price, plus-or-minus...fair value, not a steal. That leaves plenty of room to take care of anything that might be needed...the right way...and still be into the project for no more than current market value.