"Buying a 'transition house' for a few years?"

That won't be done with the 5000€, it will now almost certainly be bid up. During the viewing, he also said that he had no interest in putting the thing online because he doesn't want the crowds of people at the house...

We cautiously (!) asked if anything could still be done about the price and received positive feedback. If it had been around 5000€, he could have simply said "no, it's not".

Well, we'll see, he hasn't responded to our commitment yet – maybe everything will still take its course, but that's very unlikely now.

Yes. The usual game with selling a house. From my experience especially with private house sales. Well, you save the fee for the real estate agent. But I have also experienced it several times. There are people who write "for sale without agent" and try by all means to push the price up. It also happened to us with a property we wanted to buy from acquaintances. We then did not take it. Unfortunately, it was not beneficial for the relationship either.

...on the other hand, if you really want the house and assess it according to all criteria for value increase within your financial means, you can simply buy it. Then just add a bit more. Maybe take a look at the value increase over the last two years. In the worst case, you’re buying at the price you would normally pay in a year or a little below. Next year, it won’t bother you anymore. And in 2 years, you might think it was cheap. Of course, no one knows how house prices will develop.

I would also openly ask what he envisions. Better to step out of his comfort zone once than to keep searching for another six months or more depending on the region.

Well, what can you say – there are just incredibly beautiful moments in the house-hunting process. For example, when you have agreed on a price with the seller (we made an offer, he made a counteroffer, we accepted – all in writing by email) and the house simultaneously appears on the common portals at the time of our acceptance. That probably settles it...

Offer + acceptance = contract. From my perspective (not a lawyer) he has now sold you the house, even if it has not yet been notarized. If you back out without cause, I would see him as liable for damages accordingly. I don’t think it’s fair towards other interested parties if he then further tests the value, but in your place, I would not address this. Instead, I would ignore it and not respond to it at all, but rather ask him when things will proceed – possibly even by proposing a notary and potential dates on your side. New customs in "seller’s markets" do not necessarily have to be legal; if necessary, I would consult a lawyer. But first of all, thank the seller for the agreement, mention the purchase price, and inform him of a notary you trust and convenient dates (in +14 days). Moving forward with your head down now seems just as unnecessary as increasing the purchase price again.

From my point of view (not a lawyer) he has now sold you the house, even if it has not yet been notarized.

Sorry, wrong layman's opinion. Sale of real estate = MANDATORY notarial certification. No purchase contract comes into existence otherwise. No matter what is agreed privately (in writing). Therefore, also 0 chance for damages, etc. ==> see [Baugesetzbuch]