The loan terms are good. 5% at 30 years is strong and him paying closing costs is good.
The main thing I would be worried about is home price. He knows what you are approved for, so he knows how much you can pay. I would maybe your own Realtor or even an appraiser to verify the market value on the home.
But working with these types of people in my job, they are in a position to take advantage of you, but if you find an honest person, they can also get you a great deal. Because they do so much themselves, they can make concessions on certain things because they are getting so much of the deal that normally get's spread around when different people are doing everything. I have a few clients that really give some people some sweet deals, but they are very honest people and have great reputations.
So yes, he is in a position to screw you over, but it doesn't necessarily mean he will. Just check on the value and condition of the home and that should put your mind at ease a little bit.