I think that Frenchman was bluffing, or a wind up.
Without original Carte Grise he'll have bugger all chance of getting it registered in France, especially as a import.
The reason why so much of this old french tat is coming over here via various auto jumble chancers' vans is because their govt has clamped down on the issue of the CG and its virtually impossible to get a new one. They want documents from the original dealer or factory to ID the thing, no chance.
Their bureaucracy is a nightmare regarding such things.
Even if you can get new docs you are often restricted to riding the thing to a radius of a specific distance from your home.
If it owes you 3k, and you have been offered 1700 why did you not take it rather than throw money at it?
Then again, ownership of German cars does signify a certain tendency to masochism...............
Ve haf vays ov taking your money...