That's probably a bit more than I would pay, however, it appears to be in very good condition, it's a dealer selling it, and it comes with a full service history. Maybe you can knock them down a bit?
I sold a couple of very similar engines (similar age, hp, spec etc, although Mercury not Yam) on ebay recently and got about £1000 each for them. Likewise I bought a 2005 Yam 25 4-stroke recently for £1000. Those give you something for comparison.
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