Hmm. The car does look like it's in great shape, but that price doesn't reflect the work needed to diagnose and repair the issue with the cluster. It could be as simple as a cluster or it could be a whole diagnostic process to find an issue with wiring or any other number of issues.
My friend has an E36 M3 that has a cluster that doesn't work properly most of the time. It's definitely not a cluster as the cluster in there is a replacement that was put in with hopes of the issue getting resolved. In a case like this, it could be wiring, it could be grounds, it could be... who knows. I'd hate for you to have to deal with a situation like that.
If I was to buy this car, I'd offer him less than that, probably more like 10-10,500 TOPS, because of the unknown diagnostic costs associated with that cluster. Also, for all we know, that cluster could be a "replacement" as well, and maybe the mileage isn't actually correct. It would have been nice to see a direct shot of the odometer to see if there is a tamper dot next to the odometer, which would indicate a true issue with the cluster or potential mileage fraud.
There are too many question marks with regards to the cluster functions not working. It also depends on what cluster functions aren't working. Is the odometer working? It would be helpful to hook up a computer running PA Soft to see what the mileage on the LCM is in comparison to the cluster.
There is no doubt that if this car didn't have the cluster issue, this would be a nice pickup at this price.
EDIT: It looks like there is no tamper dot. Still, the diagnostics portion of my post still applies.