I sold two Ninja 500 engines in the past 6 month.
1st one was from a 2001 500R with 670 miles, that sold for $560
2nd one from 2000 500R with 1300 miles, that one went for $500
That guy is def. asking too high. I just sold a 96 Katana 600 engine that turned for $125, but i don't like to sit on parts and i part bikes fast.
I might be selling a 3rd 500R engine soon from a 97 with 4600 miles for around $450.