I paid $750 recently for a 2004 V2 Formula with fairing, Q-ring crankset, hollowpin chain, Chris King headset, and a few small accessories (computer, kickstand, bags). It showed some signs of age with the paint and cables and chain idler, but I've been quite pleased with it. The Formula version came with Velocity Thracian wheels and SRAM X9 components.

The asking price for yours seems high. I would ask more specifically about the $400 of upgrades; what did these include and when were they done. I suspect the owner may want to recoup some of this spending with the sale. Like others said, carry your ruler or chain checker tool with you, inspect the frame and tires and drivetrain very carefully, and tally up the cost of what would need maintenance anytime soon. If the chain is very worn, replacing it often requires replacing the cassette as well.