Not a bad deal, though I've seen better. I've owned a couple J-arm Banshees in the past and they're OK. I never had any suspension problems or failures.
$ 1,000.00 is a bit high for a Banshee that old with a blown engine, though. I'd offer the guy $ 800.00 cash and be prepared to walk away if he refuses. Make your offer in the presence of the seller's wife or girlfriend if you can. You'd be surprised the pressure a woman can put on a guy trying to make a deal. She sees all that cash and suddenly you have a deal made, even if the seller was originally firm on his price.
I've spent $ 800.00 on what I thought was a decent project Banshee, only to discover I'd been ripped off. The engine turned out to have a damaged head gasket, and therefore water had gotten into both cylinders and caused rust damage to the cylinder walls. Not a good day, that day...