offer him $800 and see where it goes from there. anything under a grand is a decent price for my area. like mentioned above, check the tank over for major chips, scratches, silicone probs.
I bought that same tank with stand and all accesories for $800. However I did wait about two years before I found a deal like this around here. I would say offer him $900 and wait to see if the deal falls thru with the other guy. Of course there is always the chance that he doesnt really have another offer and he wants to make sure he gets $1000 for the tank. If not then you will find a better deal eventually. Good Luck!
Last year I found a 240gallon + stand + FX5 + 3 heaters + gravel + fish food + Coralife 36" 10K lighting all for $800. I could have haggle for a lower price but $800 was to good to pass. The best part was the tank was predrilled on the bottome as well. Craiglist has so many deals its unbelivable. I just picked up a 90 gal and stand for $100 last week. Personally I think $1200 is pretty high but if you are inpatient and have the cash then why not. Good luck in your search...