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You were correct in turning down that offer. $7500 is at the top of the range and the car should have come with complete service records, from day 1. No, there should be no vibration, and the ATF had never been changed, and the oil should never be black. Wisp coming from the tube? Could be a clogged flame trap or moisture in the oil.
The 850 is a good car, as is the 1998 V70 (same car). Keep looking. You might even find a T5 or plain 850T which will leave your hat in the back seat!
If you look at V70, be careful, the 2.5L engine is a low pressure turbo and the 2.3 is the go fast car.
Klaus
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98 V70Rawd(108Kmi), 95 854T(88K mi), 75 164E(173K mi)
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