You might also be able to tell if the bike is running lean by going down a steep hill in gear and see if it pops or gurgles a lot. I have heard that is a symptom of being lean, but keep in mind that will only identify the idle circuit. To check the pilot and WOT circuits, you have to pull the plugs:
If you are really off on the mixture, you will start to stumble when you hit 1/2 throttle or so. If you pull the choke and it runs better you are definately lean, but I doubt that just drilled baffles would make it that lean.
Complements of Thunderglass...
This is the best chart that I have found for reading plugs.
That really doesn't sound like a bad deal on the 700. I think those are the older twin pin style (no HD sound, but more power) with dual carbs and have heard they will fly. If it runs good and the temp light don't come on I'd take it. Maybe offer him a bit less because you "don't like loud baffles and might have a hard time finding a stock set". I'd easily take that over the rebel for the same price. Lots of people run with drilled baffles, and it shouldn't make that big of a difference, but rejetting the carbs ain't that big of a deal anyway. If you can't find the jet kits for these older bikes, just try shimming the needles or swapping jets.