A 686-3 in original condition will have S&W wood grips.
The Standard Catalog of Smith & Wesson 4th edition list $550 as value for the 686 (all engineering changes) in excellent condition.
I would opine that a majority of members of this forum would agree with the following:
1. The dash-3 is a pre MIM model and that would make it more desirable (i.e. more valuable).
2. 4" barrel is more desirable than the 6"?
3. Wood S&W grips are more desirable than the rubber grips offered on later models.
A quick look at Gun Broker for successfully completed auctions (i.e. the item actually sold) reveal roughly 10 successfully completed auctions for the 686-3. All of those in original condition sold for more than $650.
Taking all the above into consideration I think you could argue $650 is a fair price.
You can't go wrong for $650. Maybe not the deal of the century, but you certainly won't get hurt. Might try approaching with 6 crisp $100 bills and see where it goes from there. FWIW, I just sold a dash 2 today that was a Police Trade. Mechanically great but had some scratches and a few nicks. Not pretty but a great shooter. Buyer was glad to pay $550