I worked in two schools one with a 1.5hp uni and one with a 3. The 1.5 would be fine for a hobbyist, but the 3hp would be a big improvement. If the price of the 1.5hp seems high to you (It does me) I would pass and wait for a 3hp.
Is that red all over the top rust? I think $850 is what I would offer.
Depending on what vintage it is, that price is a little on the steep side. I once got a 1964 Unisaw and paid $450.00 for it with the same 1 1/2 horse single phase motor. Try to talk him down some; these are workhorse machines and will serve you well for many years.