From the pic, the belly doesn't look that bad....definitely needs a neck reset.
Edward, I occasionally buy an instrument on Ebay and my first rule of thumb is to never forget that the instrument will arrive with issues that are not detectable in pictures and descriptions. When I'm looking at instruments there, I'm looking for projects or parts not ready to play so I expect problems. What I don't want to forget is that most of the problems list are not complete. My opinion is that there are some sellers that are "less than honest" about their instruments but it really seems to me that the biggest problem is sellers who simply don't know much or anything at all about what they are selling. On the surface it sounds like a way to hit a good deal but my experience is that this ignorance is much more likely to net my an instrument that requires more than it is worth to get it playing again.
My second rule is that I set my price limit and stick to it. If I decide to bid, I set a limit that reflects my assumption that the instrument needs more work than the listing indicates. As you might imagine, I don't win many of the auctions I bid on and I don't actually even bid on meany of the auctions I watch.
I have bought some parts and instruments from vendors that I feel have proven trustworthy and I don't hesitate to purchase from them on Ebay when they have what I need. I sometimes see listing that are posted by people/ vendors that I'm already acquainted with and I wouldn't hesitate to take their word in the listings. ( A case in point are the listings that Gryphon has had up on Ebay in the last months. I haven't seen anything there that I felt a real need to get but I wouldn't worry about bidding if I did for obvious reasons.)
I guess the point is that I feel your pain, having been burned a time or two but there are ways to find a good purchase on Ebay if you are careful.
It's been stated hundreds of times on this forum that buying a guitar sight unseen from a private seller is an "assumed risk" and a "buyer beware" situation.
I think the only good advice is "DON'T BUY A GUITAR ON EBAY". If you do, well, you waive your right to complain and we don't want to hear about your troubles.
Sorry if that sounds callus but...if we did want to hear about it, it would take a whole new form to field the complaints.
Again, sorry if this reply sounds like a scolding, but it's the honest truth.
Edward, it was a good idea posting some rules for yourself for doing this. I'm sure we as a Forum , could think up a bunch more too. ( are there any smells associated with the guitar is a good one) .
The majority of my Stromberg/Voisinet and Kay Kraft collection was bought on Ebay, and I have had 2 sellers who intentionally tried to rip me off. Both situations were vera bad, with lots of fallout afterwards too.
Funny you should bring this up as I just had a regular customer ask me to take a look at some 12 String Guilds on E-bay that he was considering buying. The first link he sent me had some pretty detailed pics and I could tell that there was no break angle and that it would definitely need a reset/refret. The second link he sent had a good amount of saddle left, but I told him to ask about the action and the seller told him that it was around 1/8". I knew that by the time we got the action down to a comfortable level the saddle would be too low for any future adjustments.
Long story short I told him that as long as he was okay with putting in several hundred dollars worth of work in the near future then it would be fine. I personally try to keep customers away from vintage ebay guitars especially acoustics. Very few players are aware of the fact that acoustic guitars need neck resets.
Edward, I have over 300 transactions on eBay. I have had only a few bad/weird experiences. I love it. Bought and sold many guitars. Due Diligence is the key in my opinion. Yes, research the seller, ask questions, follow eBay's transaction advice, learn the tricks people play, pass on any item/seller that doesn't look right. Your in the right place if want fix that Yamaha, and on the other hand you're 'preaching to choir' on guitar care and damage causes. Cheers, Tom
btw: IMHO a twelve-string tuned to pitch is not 'a bad sign'.