[Thor]

Mark, that depends on what your final goal it. Finding a really INexpensive Luger, that works, is a great thing in itself, but I think you need to look beyond the mentioned Luger. Spending additional money to make it look new again is another step. You might be happy with it as it. Again, buying Lugers that are beat up and poor are not usually the ideal candidate, as they take even more work and money to get them to look really nice. The ideal candidate in my view is one with minimal bluing remaining and pretty good metal. I once both a Luger that was missing its hold open device and when I tried to lock the action open, the salesman told me it was a "bad mag" but I did work it to my advantage when I field stripped it and pointed out the missing pieces. I think the take down spring was gone too. Food for thought!
Back to your original question, this price is about right for a nice shooter, not one that sounds like it might need a lot of work. This kind of price reminds me that Luger prices are going up. Mark, I think you can do better for $500-$600 if you shop around a little more. Who knows, when you find a nice one, you might be happy with it as it exists without spending any more to fix it up. Good luck and good hunting!!