You seem to have done a little research on what the particular model Fender Guitar in question should sell for. And from your question, it appears that you have some concerns about why this one seems to have been on the market for some time.
While the other answers offer good general advice about assessing the condition of a particular guitar, my answer will be more about your concern about the value of the guitar based on make and model - assuming that it is in good condition and passes your inspection.
Obviously if you are looking at a guitar that is "several hundred dollars" less than retail and "several hundred dollars more than used" - you must be looking at a guitar that you will spend more than several hundred dollars for - so I can certainly understand that you would not want to pay "several hundred dollars" more than you should - from a sound investment point of view.
In general where I live (in the U.S.A.), a used guitar (even a brand name like Fender or Gibson) that is not a collectible or vintage or rare guitar, would be considered a good buy - if priced at about half of what it sells for new. This assumes it was well cared for and is in good condition with no damage or flaws that the other answers have properly advised you to look for.
Music stores who buy and sell used instruments will usually price them at between 60% and 70% of original price new. I am willing to pay a little more to buy a used instrument from my local Guitar Center, because I know that I have 30 days to return it if I discover problems with it after I take it home and start playing it.
Private seller's can price their instruments anywhere between the average used and new price. That does not mean they are ever going to get what they are asking for it. It does not necessarily mean that there is anything wrong with the guitar. It is quite possible, that the person selling this particular Fender, is just holding out for a higher price than the going rate for a used guitar of that make and model.
However, there are a few things you should be wary of when buying anything used, and particularly a Fender guitar.
Be sure the instrument is not stolen. You may know the person selling this guitar so you may not have that concern. But for future visitors to this site who may have similar concerns, consider that if a crook wants to sell a stolen musical instrument, he is not going to go to a pawn shop where he/she knows the serial number will be checked against police records. The crook could easily get a pay as you go cell phone (or steal one) and run an ad and sell some stolen goods and then sell the phone and disappear.
Another thing to be very concerned with on Fender and Gibson guitars, is the possibility that it is a counterfeit. It may be possible that the seller does not even know it's a counterfeit because he/she bought it used. But there is a copious supply of counterfeit Fender and Gibson guitars circulating around the world. If you choose to buy one, you don't want to pay the price of a legitimate Fender or Gibson.
Here is a good article from the official Fender Forums about how to spot a fake or counterfeit Fender guitar How to spot a fake Fender Guitar
If you don't know the Seller, you might ask for the serial number. Just say you want to research the value and you know that the serial number will tell you the age, model and other information to help you gather more information to satisfy yourself about the value. If the Seller refuses to give you the serial number, perhaps it's because he/she knows it's either a)stolen or b)fake.
Once you are convinced that the guitar is not stolen and not a counterfeit, and you have checked the action, the hardware, the electronics, the neck, the tuners, the truss rod, as described in the other great answers here, you can further research the value by consulting the Blue Book of Guitar Values Blue Book of Guitar Values
I buy used instruments often (usually from folks I know or retailers with a return policy) and I like to know that I am paying a price that is fair. So the first thing I do is look at what other used guitars of the same make and model and year have been selling for on E-Bay, or Craig's List or search on Guitar Center's website for a used one like it. I like to know the year because manufacturers often change the specs from year to year in ways that affect the value. Sometimes an older model is worth more than the newer version of the same model - sometimes just the opposite.
If it were me personally and I was buying a guitar that I was not all that familiar with from a private seller whom I did not know - here is what I would do. After I looked at the guitar and confirmed that it appeared to be in good condition and that I liked what I saw - I would say - "You know I really like this guitar and I am interested in buying it. But I have no idea what it's worth and $1,800 is a lot of money for me. Would you mind if we take it up to (Guitar Center/Music Go Round/Any Place that buy's used guitars) just to see what they would pay for it and what they would sell it for? I am certainly willing to pay more than they will pay, but as long as your price is a little less than what they would sell it for, I will feel good about your price."
I have done that a twice - but fortunately there is both a Guitar Center and Music Go Round in my area. The folks that evaluate used instruments at places like that, know what to look for and have the guitar value guides at their disposal. So if I am spending more than $1000 on a guitar from a private Seller, I feel much better if someone in the business of buying and selling used guitar, confirms the value. Another option might be just to say you would like a professional guitar repair technician or luthier to take a look at it for you. Many folks in the guitar repair business have access to value guides as well.
With a thorough inspection, a little research and due diligence, a little haggling, and a little luck, perhaps you will acquire a new addition to your guitar collection at a price you will be happy with. Good luck.
