Posted 31 October 2012 - 04:47 PM
Hosting and domains are separate. Domains cost ~$10 per year. To have a ".com/.org/.net" you must pay this fee. No exceptions.
Hosting can range from free to several thousands per month depending on the features, type of hosting, etc. I wouldn't trust free hosting for a business site, though. They're normally overloaded to the point that they're pretty much useless. Not to mention they normally have a ton of ads (nothing is free, that's how they offer "FREE" hosting).
The only way I can see this offer as being legit, is if the person is already leasing their own dedicated server/VPS and is offering to put your site on it for "free".
I wouldn't trust his offer either way, though. Sounds like he is just wanting to snatch the domain up and take it "hostage" to make you pay hundreds if not thousands to get ownership of it again.
Also, if it was legit - you could keep ownership of the domain and simply point the DNS to this "free" hosting/server. The letting it expire so he can point it, is completely wrong.