Outlaw is correct. It's a CBS-era Fender, and right off the bat,those don't command as much as pre-CBS Fenders. It has the F-tuners, the F-neckplate, CBS headstock and the bevels on the front and back of the body. The originals didn't have and bevels at all.
Plus, it's a re-fin, and that takes away from the value as well.
Kurt Cobain
did help boost the prices of these things in the early to mid-90's, and maybe they've come back down a bit. I mean, he certainly influenced my purchase of 2 Mustangs, a 1978 and a 1964. However, I've sold both of them. I traded the '78 in on something, I can't recall. It was like this one with the bevels on the body, etc. I just never totally dug it. I traded in the '64 on my first Les Paul for a couple of reasons. When I bought it, it only had a portion of the headstock decal still intact. I contacted Fender, and they send me a new headstock decal, but it wasn't correct for that year, and they said that it was all they had. I put it on the guitar, but I wasn't 100% happy, so I traded it.
Pre-CBS Mustangs still fetch a pretty good amount of money, though.
As far as the sound and playability go...it's all personal preference. That vibrato system is notorious for not staying in tune, and having owned 2 of them, I can say that they really don't stay in tune very well if you use the vibrato. Tone-wise, though...they're pretty nifty. Each pickup has a 3-way slider switch, and you can put the pickups in and out of phase, which can give you a lot of different sounds. Are the sounds useable? That's up to the player.
Another aspect of the playability is the short-scale neck. Even the standard neck on a Mustang is pretty short, but then there were some with even shorter scale necks...my '64 had the shorter scale neck. It may be weird for some to play.
Before I bought either
Mustang I've owned, though, I actually bought a 1965
Fender Duo-Sonic II. Same body, pickups and switching as the Mustang, but no vibrato. I had read that they only made the Duo-Sonic II for one year, but I found a site that had some examples of made after this one year period, but still...they were only made for a short period of time (late '64 to '67). I kinda dug the Duo-Sonic II's more because they stayed in tune better but still had the same vibe. So, I still look for Duo-Sonic II's. I found one more, a 1964, and I still have both of my Duo-Sonic II's.
I think they sound great for certain things. Neither will be my main guitar, but the '64 sounds
great distorted...the pickups have aged well. The '65 I have is a little brighter and cleaner, and it has a beautiful flame on the neck. It's a much nicer neck than should be on there, but this was a period where Fender was just using parts from whatever guitars to make 'em. Both Duo-Sonics I have are pretty different. The '65 has the nice flamed neck, longer scale and MOP dot markers where the '64 has the shorter scale neck, no flame and clay dot markers.
The Mustang will never go for the crazy money that a '59 Les Paul will, but they're still cool guitars.
That said, I'm not sure a '67 refin is worth $700.00, but maybe it is.