I hate to sound like I am raining all over your parade, as a new member, but to snag a good one at that price will be tough - not impossible, but nearly so. Please hear me out.
The first thing you need to do is to educate yourself about these cars, by checking the prices, on autotrader, ebay, the enthusiasts forums and also by driving some of them.
You might also be advised that the enthusiast forums often times have the best kept ones, with owners wanting to sell them to a good home, and the best examples of the cars are found at these sites - for most any car, actually, and for the same reasons.
From 1980-1985 you will be looking at the W123 models. (actually the W123 section of this fourm is the best place to ask about them.)
Here is one (from another site you should join, and ask on the Diesel discussion section of Mercedesshop about them - it is a GREAT forum with many enthusiasts, DIYers and actual mechanics on it)
1980 Mercedes 300TD diesel wagon - $7900 - ShopForum
Sounds nice, but as you can see the price is high...
The reason is that high fuel prices are pretty high, and there is interest in Biodiesel and WVO fuels that is put into these cars.
Don't buy anything that has had WVO run in it, they can coke up the injectors and ruin the motors.
Almost 100% of the Mercedes W123 wagons from 1980-1985 were diesels.
The later ones were all turbodiesels.
The only gas powered ones were the occasional 230TE and 280TE gray makket ones that were meant to be sold in Germany but were imported on the gray market, and many of them have high mileage on them and rust, so there are a few of them out there.
There were NO Mercedes diesel wagons for 1986 at all.
The new style 1987 wagons were available in Diesel engine variants ONLY in the US for 1987. That said, the good ones are really fought over, and
The did make
Why? Because almost 100% of these wagons are Diesels, and the 1987s are
really hard to get, and invariably fought over. It is hared to find these one year only diesel wagons for under $10,000
It may be possible the 1987 diesel wagon is out of your budget.
Here is a Mercedes shop forum member with both a 1982 AND a 1987 Mercedes diesel wagon for sale, with pictures side by side of them both, so you can tell the difference between them.
Selling my 82 and 87 300TD wagons - ShopForum
The 1980-1985 diesel W`123 wagons have self leveling rear suspensions, almost all of them are automatic transmission cars, and some have the desired 3rd seat option in them, and some have the dog sdcreen behind the rear seat.
For some reason, all the blue dashboards tend to crack more frequently than those of any other color, but it should not be a deal breaker. You can get Dash covers at the flea market for $10-$20, or a molded plastic coverlay to put over it for more.
The W123 cars DO rust, and this COULD be a deal breaker, if it is bad. The car needs to be inspected carefuly for rust, especially at the jacking points, and around the bumpers, fenders, and cowl, and underneath and even on the floor boards, peel back the carpet and look. Might even be worth running ti through a carwash to see if and where it leaks.
Electrics, vacuum lines and the airconditioning and heater can be expensive to fix, so make sure they work. The diesel engine should have good compression and the transmission should not flare or jerk or hesitate, and the steering should be tight and without slop. The seats on the W123 are bouncy but should not be collapsed.
It kept up they will run to incredibly high six digit mileages, and they are built and engineered to the very highest standards, with the legendary Mercedes Benz quality in every one of them.
If you can find a good unrusted and uncollided one, with books and records, and it checks out, you will get a good car for your money.
But I think the W124 (1987) wagon could be outside your budget.
Be sure and ask in the W123 and W124 forums about this, and join MercedesShop - Mercedes Benz Parts and Technical Information
and ask in Diesel discussion.
There is frankly not too much traffic from female members, so you will likely get swarmed with good, informative answers. Just though I would tell you.
Good luck in the hunt.