"I think he has to say sold locally and end auction before winning bid is finalized."
WHERE in the ebay user agreement does it state you can end your auction early and sell it locally?
I certainly may be wrong, but when you list an auction on ebay it's a contract to let the auction run it's course, with VERY few legit ways to "get out of it.
If something is for sale locally with a reasonable chance to sell it, WHY spend the $$$ to list it on ebay?
Here's the official "end it early" info on ebay.
Do you see "I sold it locally, so screw the ebay buyer" listed as a valid reason to end an auction early? (I certainly do not!)
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