I would go inspect it with cash in hand, initially offer about $75 below what I was prepared to pay, and be prepared to pay $200 to maaaaaybe $300, depending on what you find. I'll explain why:
Looks like that is a UE-8, which was basically a UO-8 with fenders, rack, generator, lights.
See here http://www.mytenspeeds.com/My_TenSpe...troduction.htm
A basic UO-8 in decent, rideable condition but showing its 35 years of wear, is a common vintage bike, sells for about $100-150 up here in Portland, maybe the same in the SF Bay. I think you're in a high-priced market - not that Healdsburg is San Francisco but he has city folks looking at the CL listings.
A UE-8 is worth more. They are not as common, by a long shot. The addded bits would take some work to find and would cost some non-trivial amount of money and time.
Fenders - I don't know what original Peugeot fenders and hardware cost,c an't say I see them for sale often. New VO brand fenders cost about $60/set, but i hear the original ones are better.
Lights - Better check that these actually work . . . and if they do, try cleaning the lenses, oiling the motor, etc to bring them back to snuff. Not sure how much original ones cost, but new generator/light kits or good battery/LED light kits start at $100 and go up from there. Of course, the new stuff works a lot better than the 35 y/o stuff, but I think it is cool to have the original kit - even if you carry a modern torch just in case.
Rims - It looks like the rims are not the typical steel Rigida rims with a waffle pattern. If they are aluminum rims and the wheels are in decent condition (rims straight and not worn out, spokes not rusted/broken/missing), that is a meaningful plus and worth, in my mind, $50+. Why: braking is ineffectual in wet weather with steel rims, the Rigida waffle pattern merely makes it noisy and ineffectual. If you actually ride the bike in the rain, which would be the only reason to have fenders, you will want to replace the steel rims with aluminum rims. That costs at least $40/wheel, assuming you buy a cheapie new wheelset. If you want to keep the original hubs and have a new rim laced on, that will cost around $40/wheel in parts and $40/wheel labor.
If the rims are newer with a lip to retain the tire bead, which allows pumping to higher pressures, then $60+. The old rims, without the lip, don't let you inflate tires to over 70-80 psi without risking blowouts.
Normal checks apply. Look for any cracks on the plastic of the derailleurs, frame damage, etc.
Assume you'll have to replace cables, brake pads, tires, tubes, re-grease bearings, etc - normal overhaul of an old bike. Are you bike-handy, or willing to buy a few tools and learn? At a reasonably-priced shop that works on older French bikes, an overhaul costs $80-150 (varies widely). You can spend that on tools, do the work yourself, then you'll know the bike really well and won't be reliant on the bike shop for future maintenance.
Make sure you know what you're getting with a UE-8. It is a pretty heavy bike, my daughter's UO-8 weighs nearly 28 lb (+/- 2 lb, just bathroom scale weighing), the UE-8 will be heavier. The shifting and braking will be okay for a vintage bike, not close to a modern bike. The geometry is nice, the ride is comfortable. With an appropriate seat - which might or might not be the leather butt flosser that is on there now, depending on your butt - it will be a very comfortable, relaxed bike for riding around town or long country rides at a moderate pace. If you're racing your buddies on modern bikes, pumping up steep long hills, dicing with cars in heavy traffic, it won't be the best choice.
If all that sounds suitable for you - and since you said you're looking for a vintage touring bike, I'm guessing it is - then I'd pursue this one. Personally, if it looks really nice, everything works and is complete, I'd feel okay paying anything starting with a a "2". I'm thinking $125 UO-8 + $50 fenders + $50 lights + maybe $50 rims (if they are aluminum and newer).