For $7k, you can get a newer trailer without the roof rot.
I suspect the $11k figure is wishful thinking.
The numbers that get tossed around for a new roof without any complications is around $4k, so $3k for some substructure work doesn't sound too far off. They might be up-ing the price to avoid having to come back and keep asking for extras when they open it up and find additional issues.
Probably best bet is to sell it for what you can get. I wouldn't highlight the issue but I also wouldn't hide it. Odds are you can get a few grand out of it and then put the $7k with that to get yourself something in the 7-10yr old range.