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HousecatHST
To an extent, it's up to you.
Some people in this situation might insist on physically inspecting the item before paying for it, regardless of the method of payment. So
It's up to you if you want to go down this route. It might piss the seller off, so if you want to do it please tell them that's what you'd expect and if they have issues with that approach raise them now. Of course you could inspect the item before the end of the auction - it's just a PITA to do so.
OR you could as you say immediately pay the full amount by PayPal. This is good for you as yes you are protected by PayPal and the onus is on the seller to prove you collected the item, so they can't just pocket the cash and say you collected it without some kind of evidence. I wouldn't bother doing some kind of deposit arrangement - in the event of a fucked or missing item claim it would complicate things.
Hope that helps.