The only top-break 38 caliber revolvers Iver Johnson ever made were for ammunition called "38 Smith & Wesson". It is not bottlenecked in any way I can think of, although the bullet has a small shoulder on it. It was introduced by S&W in the 1870's and was very popular until about 1930, with millions of revolvers made for it by a variety of companies, including Colt. It remained fairly popular until about 1945, and then began to fade, but slowly. So many guns still existed for it, and were still used, that it was easy to get up thru the 1980's. But after pretty much everything made for it got to be over 50 years old, demand for it began to drop, and I guess now it is hard to find on the shelf anywhere. It is still available from sellers on the Internet, I am sure, although I can't tell you any names.
Because this cartridge was introduced in the 1870's, it originally used "black powder", the original mixture of charcoal, sulphur, and saltpeter. Because it was popular and long-lived, the ammo makers switched it over to smokeless powder at some point. Smokeless powder develops higher peak firing chamber pressure than black powder, so gun makers had to redesign guns slightly to use it, if only by improving the steel used in the cylinder if needed.
Unfortunately, Iver Johnson was slow to do this. Their top-break revolvers are divided into three groups: First Model, Second Model, and Third Model. None of the First or Second Models were made for smokeless ammo. Some, but not all, of the Third Model were.
Judging from the orientation of the owl-head on the grips, I would say the Iver Johnson in your picture is a Third Model. The real proof is to remove the grips. If the spring that powers the hammer is a coil spring, it is a Third. If it is a flat spring, it is a Second. The First Model used a different top latch, so we can rule that out. I think to be more specific, we either need the serial number (which I think is also under the grips) or a real Iver Johnson expert, which I am not.
Given what good shape the side we can see is in, $250 does not strike me as a bad price if the other side is much the same. There is more interest in these guns than there used to be, this one is quite nice, blued IJ's like this are less common than nickel, and Third Models are less common than Seconds. Of course, guns that are mainly collectibles can be harder to resell for full value than shooters.
BTW, Colt did not like putting Smith & Wesson's name on their pistols, so they made a trivial change to the cartridge (their bullet had a small flat place on the nose, instead having a rounded tip) and got the ammo companies to make that as "38 Colt New Police". It is completely interchangeable with regular 38 S&W. The ammo companies dropped it around 1965, give or take most of a decade. If you find some of that, it is fairly old, but if it is post-WWII (say, if the box has a zip-code on it) then it is probably shootable. There is a LOT of old 38 S&W ammo around, and the older it is, the more dubious I would be about using it.
