I'm probably the eternal optimist, but that bike has the potential to be a real heartbreaker. It needs a complete frame up restoration, and I do mean frame up.
$400 is about $300 too high. There's no telling how much it will take to make it reliably roadworthy. As mentioned the intakes are a real mess, can't tell from the photo if there are a second set in the background still attached to the head. The head has to come off just to see what is in there.
Those 16V RS's are sweet, but Filmcamera can testify to how much trouble they can be if they've been neglected.