The one thing you do not want to do is to rush into something. You are already grieving for Larry. Take your time with this.
Getting a bengal without papers does not mean the bengal is not purebred! However, most owners want their bengals at least registered. In order to do that, you have to produce registrations for the parents. Most registration services have pedigree information going back to the very beginning, but without verification that the parents are purebred and registered, you will be unable to register yours. Thus, you have zero proof that your cat is a purebred bengal.
As for price -- many times you get what you pay for. If you are looking for an older cat, many breeders sell their retired breeders. If you are looking for a kitten, definitely go with a breeder with an excellent reputation. Prices are set by the breeders and they vary considerably. Know, too, that some breeders end up with cats six months old or older and sell them at a discount. I would suggest you check out the websites for breeders in your area and see what they offer.
Now ... as for this little lady that you are considering. I would consider (personally), the price you've negotiated to be high for an unregistered bengal. You could very well be getting a bengal mix for all you know and they are not worth much money. But, this is your decision and only you can make it. if you really want this kitty, buy the kitty! If you are skeptical, run the other way. Sometimes you have to go with your gut feeling.
I'm not sure where you're located, but feel free to PM me with any questions or your location and I will see if I can help you out.