He is part of the "Temple Of Ikov" Quest, you may need the requirements of that quest to be able to speak to him about anything.
no you can not sell your house on runescape.
No, Your RuneScape House is based on your Construction Level.
Camelot
Go to the place with the house icon in varrock.
in the volcano at michaels house
open the door
Yes.
Yes.
you build on your house
yes
No.
There is nothing illegal about playing RuneScape.