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Changing the timing belt and water pump makes sense. If you were going to keep the car you might want to consider thoroughly checking the seals and oil pump but as it is go, with what your mechanic suggests. There may be a tension pulley/spring that may need to be replaced for the timing belt.
If there is oil in the compartment you have a descision to make. It's not good for the timing belt but you may be able to postpone it until you sell it. However, sell it sooner rather than later.
Kep
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Often, it's the loose screw between the steering wheel and the driver's seat that needs to be fixed first!
Stock 1995 Camry, 5SFE, Sedan.
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