What would you do? Selling a bike.

Personally I would stay clear. If someone wanted, and was genuine about buying the bike they would be on it a bit more, I think it is fair you letting him know their are other offers on the table, and they still haven't contacted to move it on, or by the sounds of things shown a genuine interest, therefore selling it to the next person is fair and sounding like a lot easier transaction.
 
I've insisted on bank transfer only.

And what happens when his friends turn up to find the bike already handed over to someone they claim to not know, is he not entitled to his money back through the bank?
 
Sell it to the local guy or keep it. I very much doubt the money will ever appear in your account. This is the point where mere words meet reality and the reality doesn't support the words being true.
 
The amount of times “buyers” pester to buy an item that isn’t for sale and when you finally give in and accept their offer to sell then they go all quiet. Facebook is where is happens the most. Unlikely a scam , more likely he’s a time waster. Sell it to the local chap and sleep easier.
 
You owe him nothing.

Back in the day (like circa 2000) I once put an advert for a bike (Shogun ultegra 9 speed road bike), someone said they were "very interested", meanwhile said no to other decent offers/buyers, almost "reserving" it for this other bloke so to speak, first in first served and all that, the sneaky git came around much later and then proceeded to massively haggle me. He started with some shitebag lowball offer too. I think he was a second hand car salesman or something. Me being introverted and totally unassertive in my early 20s, was totally unprepared and out of my depth, imbalance of power, eventually agreed to a very reluctant sale, one that was not the asking/agreed price. Even tried to blame me for wasting his time/petrol etc. Nowadays would have told him to bugger off and go home. I think that's when I went over to ebay instead of the local trading post newspaper. Turned me off selling in person/privately. I learned a lot about selling second hand merchandise that day.😟
 
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I feel like as I kept him waiting, I should be fair to him

"Sorry, I've changed my mind, I don't want to sell it anymore"

Then block him and move on. It's your absolute choice about whether, who and where to sell anything and if you are feeling messed around then end the transaction.

I'm amazed at the number of people whose hobby is wasting other people's time on the internet.
 
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