Correct, except he has to initiate the Form 4 since he (the transferor) has to sign it. Then he sends the Form 4 to you (the transferee), you get the photo and fingerprints, fill out the rest of the form and send it all in along with your check. (If the seller sends you his check, he just adds the $200 to the cost of the gun, so it all amounts to the same thing.)
They return the approved form to him (the transferor), not to you. He then ships/brings the gun to you along with the original of the Form 4, which then becomes your registration paper. Keep the original in a safe place, like a bank deposit box; make one or more copies to carry with you when you are in possession of the gun. If he is going to bring the gun to you, he should send a letter to BATFE saying that he will be transporting the gun interstate and make sure there are no problems in intervening states.
The cost and means of payment for the gun are irrelevant to BATFE; it can even be a gift, they don't care. (That is why they use the terms "transferor" and "transferee" instead of seller and buyer.)
Last edited by James K; May 4, 2012 at 10:23 PM.