"I think you should call the guy up, say you've discussed things with your partners (us) and feel $500 is to little, then make him the counter offer of $1,000 If all goes to plan he will counter your offer with something like $750. Just keep saying you've got other people who are looking to buy the domain so it dosn't sound like your begging him."
Exactly what I was going to say - and tell us how it goes so we can have a laugh!