Is this rust restorable or should I stay away from this Jeep?

You guys are insane. That looks fine for a 17 year old Jeep. As others have said, confirm that the frame is OK under the skid plate, but from what I see so far it looks good. You may have some issue with bolts given the surface rusts, but this is no reason to walk away from the deal—to talk him down, certainly.
 
You guys are killing me. I wish my jeep looked that good! Over here we are lucky to find something that still has some stuff we call steel! Haha.

I guess it’s all relative to the location and winter conditions.

Indeed....this is a case where one person's trash is another persons treasure! ;)
 
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I see nothing there that looks bad. Sure, if you live in a no-salt, dry climate your vehicle may look different, but that is simply surface rust in those pictures which is purely cosmetic. If the rest of the frame looks like that then he'll spend some time painting it with a rust inhibitor, but otherwise be just fine. If it sat he'll be replacing the steering anyway, so no loss there

That's what mine used to look like - actually much worse. Now it looks like this (custom paint job courtesy my 16 y/o daughter - it's her car...)

D-
Flower Power (4).jpg
 
Looks like it was frequently taken to the beach and not cleaned very well afterwards. Mine is a TX jeep and looks very similar for that reason.
 
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Thanks so much everyone for your tips and thoughts-it really helped. I told the seller I was going to pass but now I'm thinking about giving it a second chance. I'll check back in in a couple of days and see if it's still for sale (hopefully it still is with this car market and the high demand for TJs ) and go from there. I'll keep y'all updated. Thanks again!
 
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if you show us some pic's and the price we may be able to let you know if it's worth it or not....if these things are in good shape they get snatched up fast !!!!