ah okay $paypal just makes sure the user who posted the ad has a paypal address.
Guests are permitted to buy it now.
Users whom post there ad state whether they want to buy it now and post a reserve to sell it immediately and thus end their auction and bidding.
You could try for instance to not show it to guests change that line to something like this
Content visible to verified customers only.
Therefore from what I see there is nothing wrong with the system
You would have to modify your code in some way to do something the system is not designed to do.