$3900 is strong money for a bike that needs work and parts replaced.
I paid $2400 for mine that was running and on the street, with less than 15K original miles. It has sucked up rather a bit of time and about $1300 in parts & paint since then
so far: rebuilt m/c, then replaced m/c, stainless steel brake lines, brake pads, all new cables (throttle, clutch, choke), new filters, oil, replaced clutch disk, rebuilt transmission, new fork springs and seals, new rear shocks, new rearview mirrors and grips, replaced headlight bulb, new shift linkage, new coil, spark cables and plugs, new rubber boots, steering head bearing clean and repack, wheel bearings clean and repack, new exhaust (still to be installed) and new seatcover (still to be installed), and many little nuts, bolts, screws, and E-clips... and new tires and tubes, though the 5 year old ones on the bike when I bought it were still very rideable and passed NH state inspections.
Prices for LS bikes vary widely around the country, and certain areas (San Fransisco in particular, I think) these command premium prices. But, given what you know about this bike from your first examination, and what is likely lurking underneath that needs attention, if I was interested in the bike then I'd be offering them something that started with a
"2", not a "3", unless they could show documentation of how well and frequently it was serviced and replaced the seat cover, tires, brake cable and m/c, etc. to boot.