The logical explanation is its a hacked 360 and the games are just on dvd+r, making them worth a $1 each.
I would guess the 360 has RRoD'd at some point so the seller wants rid so he can buy an elite, as many are doing.
I bought a 360 the other week with 20 games (yes, bootlegs which I didn't want) which was RRoDing, fixed it and went out to the shops and got Katamari and DMC4, As that's all I wanted the machine for.
Even if they are legit games, most of them are dire and I'd swap them all for 1 MGS game.
Oh and about the warranty, If the user has registered the 360 you will need to inform MS that the machine is changing hands. They will only deal with the person who the 360 is registered to in the unlikely event it breaks down :)
Ask the seller :
The manufacture date off the back of the machine.
If it has been retured to MS for any reason.
If its been hacked.
If the games are bootlegs.
If he can sort out the registatration with MS.
If its been banned off live.
Ask yourself :
If you really want to own Saints Row.