This is no offense to the OP, I would highly recommend you stay away from a car like that... not an M5, but that M5. Typically, anything (especially a BMW) with a lot of aftermarket stuff, is bad news and the good dealers will stay FAR away from them at auctions.
Cars like that do not fetch a lot at bidding because good dealers that stand behind their cars know they will have a lot of issues to contend with either pre-sale or after the customer takes delivery. You mentioned an aftermarket stereo? That sounds nightmarish in an M5. Did he hack up the wiring? Are they giving you an aftermarket warranty or an in-house warranty? Is it in writing and can you scan a copy of the terms and post them here? Have you pulled the carfax? Have you had the car's modules scanned by a BMW dealership or indy to check for faults? Have you inspected the underbody of the car for leaks, suspension tightness, accident damage? That red interior looks aftermarket. Is it the same quality as real BMW leather?
M5's are completely separate from an E46 in maintenance, repairs and definitely fuel consumption (expect around 12-14 MPG). 2000 M5's were plagued with problems, not just carbon buildup.. which is a big problem in itself and even after it is repaired, it returns over and over again.
The price is definitely low for an E39 M5, but that car just looks like it was driven hard. 20 grand is a lot of money, so don't get sucked in. Just do your homework!
GT1/ISIS/MoDiC = Factory authorized diagnostic system used by BMW dealerships across the world.
NCS Expert = BMW Factory R&D programming tool available on the internet (not intended for the public and not available to the dealership network)
OEM = Genuine BMW part only available from a franchised BMW dealership.
DME = Engine Management Computer
eGay = eBay