Is $7k too much to spend on a 1985 1-owner wagon with 200k miles on it?

Okay, so that is a loaded question and could spawn all sorts of answers, but I guess what I need is a ballpark for good, bad, and "cheap" wagons, mostly good, though. As I mentioned in an earlier post, I am looking for a solid, dependable, daily driver 123 diesel wagon to hold up to 5 passengers + me, and don't have the experience to recognize the appropriate price. I paid $800 for my 240, but I don't think that counts.

BTW, the link for the above car is: http://www.autotrader.com/fyc/vdp.jsp?ct=p&car_id=254566521&dealer_id=63538533&car_year=1985&rdm=1230569629910&model=&num_records=25&systime=&make3=&make2=MB&highlightFirstMakeModel=&start_year=1981&keywordsfyc=&keywordsfyc=&keywordsrep=&keywordsrep=&engine=&certified=&body_code=128&fuel=&awsp=false&search_type=both&distance=0&marketZipError=false&model2=300_CLASS_E_CLASSCLASS_SERIES&search_lang=en&showZipError=n&make=MB&keywords_display=&color=&page_location=findacar%3A%3Aispsearchform&min_price=&body_style=WAGON&drive=&default_sort=priceDESC&seller_type=p&max_mileage=&style_flag=2&sort_type=priceDESC&address=43416&advanced=&end_year=1990&doors=&transmission=&max_price=&cardist=1339

Thanks, Alex

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"Frau Blue Car" 1980 240D think Frau Bluker, cue the horses, formerly known as "China" from JimmyL
"Gunther" 1982 300D.....Turbo!! A/C!! Sunroof!!
"Fraulein" 1975 240D----Donated to NPR