The boat looks to be in decent shape. The Merc "tower of power" is the perfect size engine for that boat - hope it is still running good. The engine size, meaning narrow, light is what these 170s were designed to have. That boat will still be self bailing, like it was designed. All the newer engines in the 90+ HP are wider, heavier and pushes the scuppers underwater. Being an 85 HP will be plenty of power for the boat.
$3k doesn't seem to be a bad starting price.