I live in Nor Cal (East Bay Area, Antioch, Brentwood) and the car is located in the Bay Area in Fremont. So rust "shouldn't" be a big problem. I say "shouldn't" because you never know the cars previous history. I didn't really plan on immediately paying the amount he is asking, because well you never do.
So I am going to offer him a bit less. He is selling it according to him because he is a Chevy guy and he only bought the car because his Dad sold it to him for next to nothing and just wanted to mess around with some motor work on it to have some fun. As far as I understand it he got bored. Thanks Snail50 and Cobra1 for the rust spots to check on the stang. Thanks to everyone else so far for the advice.
How much do you guys think I should offer if the body is in fairly good condition and rust free? I was thinking $3500 - $4000 to start off with. Although I don't want to go to low and piss the guy off or turn him off to selling the car to me if it is in good condition.