IMHO; I'd pass.
He is not registered, and likely never will be able to be registered. It's a darn shame.
YOU may not mind a grade horse, but to sell a horse with no registration papers as AQHA and advertise him with a pedigree like they are doing is wrong.
As a resale project when it comes time to sell remember: YOU SHOULD NOT ADVERTISE HIM WITH A PEDIGREE, he is grade and that's the end of the story.
No papers means who his parents are supposed to be just doesn't matter. There's no proof to back it up.
"When you listen more than you speak you will always learn something. I know what I know! I need to listen so I will know what you know!"