You haven't told us anything about yourself so I will assume you are young, (passed bike course).
Some good points above.
angus67 has rebuilt a basket case so the time taken and problems reflect that, major mechanical skills required for his project.
Because i have no idea of your situation i will give a couple of answers based on different scenarios.
Make sure this bike has a title............
It has been for sale for over 3 weeks????????? maybe soneone else can comment on that
The XS650 has the best aftermarket support of any bike of its age, for new aftermarket parts and mechanical and technical help through this site. Many a person has come on here with no mechanical skills and striped and rebuilt engines with directions and reference to informational posts on here, XS650.com.
1: If you are reasonably financial and regular income. I would consider the bike and
keep it in its original condition. If it is as ride-able as the seller suggests you may get away with regular maintenance with mechanical work on parts that need renewing or upgrading as time goes by. This could be as much as $500-$600 for the first couple of years. The bike looks to be in good condition so if you do find things are getting to much then getting your money back and maybe more in the future is assured.
2; If you have the money buy this bike for a learning experience, (do not chop it up), and buy your self another later model bike or your runner while you work and learn on this one. Again if it is kept in original condition you will have no trouble getting your money back.
There is a train of thought that the charging system is useless and needs to be replaced because it is not reliable. This is
there are many bikes running around reliably on the old charging system and it can be cheaper to fix the charging system than buy an aftermarket one. Points system works, there is an art to it, (lost because of modern electronic systems), and once mastered is quite simple. There is a good aftermarket Electronic system, (pamco), but for cost sake not necessary.
You need a space that is conducive for working on a bike, Minimum lean to, preferably a shed. Shed is better for security and working out of the weather.
Here are some links to read, the first 2 are specific for buying a bike and relate to what to look for when buying a bike
Guide to Buying - Get to Know your bike, a checklist for the condition of your find
troubleshooting
The next 3 links give you an idea what is on this site and the type of information/help that you will get and need.
Expanded charging system guide
What happens when you turn your key on.
Bike wont start?, Running rough?
Good luck on your decision.