Don't be too hard on the guy, he apparently had a change of heart. He didn't renege on a contract with you. When you get some years behind you, you may do the same thing sometime.... decide to sell, then just can't do it when it comes right down to it. At least this guy doesn't have the car sitting out in the weather on the back 40, and he did let you see it rather than turn you away cold.
When something's too good a deal to be true, it usually isn't.
I once looked at a mid-80's Avanti sitting in a backyard on the dirt, covered by one of those cheap blue plastic tarps that had trapped all the ground moisture beneath it and rusted everything metal inside and outside the car (undoubtedly all the wiring connections too), with all 4's flattened, an engine compartment packed chockablock full of dead pine needles; paint was oxidized, couldn't open the trunk, nor see how bad the mud-buried frame was rusted. Obviously had been sitting that way for years, because the plates hadn't been renewed for quite some time.
But it had possibilities, seemed not to have had body damage, only had 50k or 60k on the clock, and the price was low enough to afford some repairs, so I agreed to the price in the ad and gave the guy $100 in return for a handwritten sales receipt (stating VIN, the full price, and the down payment, etc) until I could figure out how to get it moved. He said he'd misplaced the title and would look for it in the interim.
When I called the guy to arrange pickup, he said someone had seen his ad on the internet (a newly-started "cars for sale" website had copied the newspaper ad and posted it), and called him and told him he was selling too cheap, that he could easily get $20k for that car... so he wasn't going to sell it to me (of course the caller wasn't offering him that, because the car wouldn't bring that much even in pristine restored condition); I talked about the poor condition of the car and the realistic value even after an expensive restoration. When I reminded him we had a signed sales agreement, he then said that the car really belonged to a friend for whom he'd been storing the car, and that the friend had died and he couldn't contact the relatives, they sometimes came by, and anyway, they'd want a lot more $$$. I talked about the poor condition and the market value of a completely restored car like that, and offered to pay about 20% more than I'd originally agreed.
He said he'd try to contact the relatives again, to call him back in a week. On subsequent calls he said he'd contacted relatives but that they couldn't find the title and wanted a much higher price, close to $15k, and then, after a few more calls, finally, that they'd sell for $10k but that there was also a lien on the car of unknown amount which I'd also have to agree to pay (I found out there really was a lien, but DMV wouldn't give me the lien holder's name nor the amount). Then he said they'd sell the car for a little less if I'd take it without a title.
The runaround became too much at that point and I gave up and told him to return my deposit or I'd turn him in on suspicion of selling a stolen car, because obviously I'd have to sue him and/or the "relatives" to make the deal go through, and I didn't know what part of what he was telling me was legit and what wasn't.