On the surface, the price seems like a steal, but I'd be concerned about what mods the gunshow gunsmith actually did. I've seen several completely messed up 1911's where a garage gunsmith went to work with a dremel tool.
Also keep in mind that even if the gunsmith's mods are reversible and the problems can be fixed, you are likely to put in an extra $200-$300 in the process. Granted that might only take you to $550 for a good gun, but the work will take time and the results will depend, in part, on the ability of your gunsmith. If you choose to send it away to one of the higher end places, the cost could be higher.
FWIW, I've been down that road where I picked up someone else's "project" and it cost me far more money than I wanted to spend to get it to function reliably. I had thought, that the expensive mods had been done and it had an excellent trigger so all I'd have to do is change out the MSH and grip safety. Unfortunately, it was a jam-master and the fix was not inexpensive. After a few hundred dollars, the gun runs perfectly and can chamber a spent shell casing. In the end it worked out well, but had I known at the outset what I was in for, I never would've bought the gun.