When many of these guys buy from Gov't Liquidation, they don't get a title because it costs an extra $75. So they try to sell it and tell you to apply for a "homemade trailer" title. That's the way it is in PA anyway. The only problem is that it's clearly not homemade and the state knows it, plus the process is VERY expensive and time-consuming, and it could be denied. TX might be more relaxed. Worth looking into.
If your seller has a title (NOT a bill of sale) then it is definitely worth $500, assuming everything is in good shape. If he doesn't, then you might want to consider bidding at San Antonio. Long drive but it could be a fun day, especially if you like military toys. Sometimes the M101A2's (don't get an A1) go for cheap. Of course you have to pay $75 for title, and gas/tolls, and a pintle hitch, and magnetic tow lights, and extensioins for the safety chains, or get a flatbed trailer to bring it home....