It's more than I would spend on that. But you have to remember, this guy likely bought it all at a LFS, and is losing money selling it for $850.
I've had to walk away from a few sellers because of that. One wanted $300 for a 75 gallon set up with a junk filter, no heater, and a junk light.....I mean, he paid $400+ for it all brand new, but I'm not paying that much. This was 6 months ago, and I still see it for sale on CL. They just keep posting it up week after week, and I explained to them that is not the going price for that set up. Some people just don't comprehend, so you have to move on and find another deal (which I did, and it was a FAR nicer set up under my budget).
You just have to talk with the seller, explain yourself, be nice and friendly, and see if you can work something out. I've met some really cool people on CL, and have got some really nice deals just because of being friendly. But sometimes, you just can't find a common ground on price. No hard feelings, that's just business. And something else will always come up for sale in another couple weeks, so if you don't come to an agreement, just walk away and wish them luck with the sale (sincerely, not sarcastically), and leave them your phone number incase they change their mind. I've actually had a few sellers contact me this way.
Just another note:
I've found that it's best if you actually meet face to face with a seller. People are a lot nicer and easier to deal with if they are talking to a person instead of a computer screen (email) or a phone. And bring cash with you. I'd say 90% of the time, when a seller is waffling about a deal, if I pull out cash and start counting it, they take the deal.