I would be curious as to why the seller didn't disclose this (apparently it was YOUR sleuthing that discovered the salvage issue) and use this lack of disclosure to perhaps "embarass" out of him the reason for the salvage title. Your bid to his $3650 offer should reflect these facts. Salvage titles aren't popular (think lowball). Sounds like a nice car, though; but don't fall in love yet.
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The Golden Rule
1984 300SD (bought new, sold it in 1988, bought it back 13 yrs. later)
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