If I were you I would assume the car needs a whole new engine. You have no idea what is broken inside, and so should assume it that way. The price seems ok, if all else is good, but there is no way you can check if the a/c (and its vacum servos)are good, how about the transmition?.
I just saw an 1988 in great condition with a bad transmition go for 3K here in Orlando.
I bought my 300E for 5K about 2.5 years ago but had to change the water pump, dasboard and climate control servos, plus socks. I did all the work so it all came to about 1.5 to 2K.
'92 190E 2.6