You can find two nearly identical T-buckets in two different cities, and one guy wants $15,000 and the other wants $9,000 or $29,000. Pricing is very subjective. I would say if you were to build a copy of the car in the ad, you would be into the parts, paint and interior around $15K, give or take. All that chrome doesn't come free and someone spent a considerable amount of time on those flames. Can you do that, or is it worth it to you to pay more to get the finished product?
I would agree with ORF, $17 K seems like a reasonable offer to me for the finished car, as does his brick under the pedal method. You will have a little more thinking to do if the owner counters with $18 K.
I would be willing to pay a little more for the 396 because I happen to like them and you don't see them every day. I own two SBC's, but so does everyone else, enough said. As for will it stay on the road? I'm driving a 409 with a 3.89 posi rear end and I have no trouble, remember the brick.