He may have to go through the motions of "buying" the house from you. I would speak to a real estate attorney about all this. Realtors are not attorneys and cannot give advice about legal issues such as this. It will be we'll worth the attorney's fees to make sure this gets handled properly with no issues that could come back to bite either one of you.
With regards to the Realtor, have you read your listing agreement? Have you asked them?
Good luck to you!