After engine compression and the front suspension the other aspects are
rust and body repairs.

If the interior is clean it sounds like a very good price to me. I own
an '80 300SD w/ 110K and I sure wouldn't sell it for $3,500.

Rust.

Look at the bottom of the rear windscreen, open the trunk, look around
taillight anf the underlip of the trunk lip near where the key goes in
there. If the rear windscreen is cloudy at the bottom sides water
has got in and it probably didn't stop there.

Make sure all the electric doo dads work.

Check for clucnks, thumps and wirrd noises. The idle should be
noisy as hell. A quiet idle means new injector tips. Test it
for 15 mins at highway speed. Check tires. Shocks. Interior
wear? Do all 9 interior lights work? WHat color is the coolant?
How were the oil changes? Filters last changed when? Tranny filter?
How loose does the steering feel?

    http://articles.mbz.org/buying/checklists/126/

Suspension. Check the bushings, tie rods, shocks. They make a huge
difference in how the car handles and rides. The bushings and shocks
deteriorate with age and various metal bits can get bent from potholes
and rocks. Also check the steering box. It's a $1,200 item all by
itself. Check air conditioning, meaning the compressor etc. Check the
weather control system separately. That is a low-mileage car and the
engine and tranny should be in fine shape unless they have been horriby
abused. But it is also a 23-year old car and everything made of rubber
or plastic should be checked out.

1981 300SD "Der Klunker" ex-Pimpmobile.