If it ran out of oil, then I would just plan on rebuilding the entire engine from top to bottom because more than likely, if it locked up, everything inside is pretty much cooked but you really wont know till you start tearing it down. If the rest of the quad looks decent... then it doesnt sound like a bad deal .. because even if you have to dump $700 or so into a rebuild... when its all said and done you will only have $1000 into a strong running quad.
I picked my 400 up really cheap.. and rebuilt it.. I put a 416 kit in it with a stage 2 hotcam and it totally rips... If you do the rebuild correctly, you can have a great running quad for a fraction of the cost of a new one.. but it all depends on how much you want to get into this project. It can be super frustrating and time consuming but when its all said and done.. I think its worth it.