Anyone can buy a note and legally enforce it.Certainly strange payment terms.

This is not legal advice, but one alternative is that the loan documents simply give him a limited power of attorney to sign the deed in lieu on your behalf if you default (rather than you signing and him holding deed in trust).

My advice is stop wasting your time trying to out smart the legal requirements, it can't be done if the law applies to a transaction.

If this is legal, how would you be able to protect yourself from this investor taking the house?

Costs of taxes, insurance, repairs, servicing, legal fees all add up pretty darn quick.

Is that possible and legal?

From a legal perspective it would seem that the agency is charging a flat fee to "broker" the deal and that is their discretion to do so if they choose.

I've been emailing an attorney that was referred to me by a reputable investor in my area and was wondering if $500 for up to 4 hours of work is too much to be paying for his legal services?

i see Bill Bedor was scammed by BMRES in colorado and saw he was taking legal action...

It's awesome that you got the verbal offer accepted.Here is what I would do:Get the offer signed and throw in a token amount of earnest money to make it legal.