How Bad Is It?

My wife and I have been looking for a TM for a while, and finally found one to "tour."  We really liked the floor plan, but found a lot of worn or broken items that needed repair.

It was a 1998 TM 3124KS with few options (awning, a/c, spare tire)  So I figured it would be a real bargain.  NADA said retail price between ~$11,000 and ~13,000, but since it was a fixer-upper I figured something below retail would be fair.  They had obviously taken it in trade and didn't know what they got themselves into.

Sorry for the long post, but here is my question.  They said they had $13,900 in it (which I think is a lie) and would take no less than $12,500.  What do you think would be reasonable?

I told them it had too much damage to offer such a premium price.  They actually admitted that some of the damage to the shell (crushed corner) happened on their lot (as if that would change the nature of the damage).
A lot of the lift mechanism bolts were either loose or missing.  The hold down clamps were stripped.  The bathroom door, main door and many cabinet door hinges were bent or misaligned.  The velcro was peeling off the walls.  The rear top was wavy and bowed out near what I would call the side quarter.  The carpet showed hard wear and needed to be replaced.

All this in about 10-minute inspection.  I could not check the appliances or electrical system, brakes, etc.

I offered $9,000, as-is and left my number.

Any advice or feedback would be appreciated!!  I'd like to think this is not normal for a TM, despite the salesman's assertion otherwise.