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It's a consignment gun, so it's a little tougher than just floating an offer by the LGS. I'm not thinking the owner wants to drop his price that much. From what the owner was saying, he's trying to get back what he paid for it.
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I think the info you have offered above is not related to the negociation. The Norc is worth honestly $475 - 525 depending on condition. This is if it functions 100%. To establish function, you have to know how to judge if the locking lugs are being battered. If they are, value is $400 less than the numbers above, IMHO. Then you can shoot for function.
Then we talk about the RIA. The RIA is a fine gun. There are the issues above, but those are idealist metallurgical issues. Practically, an RIA is a good basic 1911. It could have some minor fit issue which causes function issues. The good thing here is RIA will back their gun and fix it for you. This is the key. You want the RIA for this reason alone.
If you worry about the cast parts or frame, then put more pennies together and get a Dan Wesson.
Frankly, I would buy the RIA.
One last thing. If you want to put a bunch of money into customizing it, don't bother. That is not the point with an RIA. Get a Springfield at minimum if you want to customize it.