Based on your post I beleive that you have covered all your bases. As long as you did not post any false information about the car or describe in false information to the buyer then you are okay. Caveat emptor, "buyer beware", is umbrella you fall under. Meaning it is the buyers responsablity to verfiy that the item they are buying is what they want to purchase. It is his responsiblity to ensure that the vehicle is legal in CO if that is what he is concerned about, before he buys the car. The certified check matter depends on what kind of check it is. If it is a basic certified check, that means at the time the check was written the bank verfied that there was enough money in the account to cover the check. It can be stopped. (If that happens then you need to contact the state police and report the car stolen and let them know you were defrauded out of the money). If it is a cashiers check, sometimes called an official check, (which is a version of a certified check) then it is the same as cash and cannot be stopped.
Ignore this pile of stinking PELOSI as it is 110% NOT correct.
The OP doesn't say WHERE in Arizona, but if he lives or works near Tucson or Phoenix, his 2004 vehicle REQUIRES an emission inspection.
In any case, removing a factory installed catalytic converter is illegal under federal law under the federal Clean Air Act
42 USC § 7522. Prohibited acts
"(3)
(A) for any person to remove or render inoperative any device or element of design installed on or in a motor vehicle or motor vehicle engine in compliance with regulations under this subchapter prior to its sale and delivery to the ultimate purchaser, or for any person knowingly to remove or render inoperative any such device or element of design after such sale and delivery to the ultimate purchaser; or
(B) for any person to manufacture or sell, or offer to sell, or install, any part or component intended for use with, or as part of, any motor vehicle or motor vehicle engine, where a principal effect of the part or component is to bypass, defeat, or render inoperative any device or element of design installed on or in a motor vehicle or motor vehicle engine in compliance with regulations under this subchapter, and where the person knows or should know that such part or component is being offered for sale or installed for such use or put to such use;"
US CODE: Title 42,7522. Prohibited acts
In this case, the seller sold an illegal vehicle. The fact that it was removed and prevents the seller from 'normal use' of the vehicle (can't get registration) is a violation of the 'implied warranty of fitness'.
An implied warranty of fitness for a particular purpose is a warranty implied by law that if a seller knows or has reason to know of a particular purpose for which some item is being purchased by the buyer, the seller is guaranteeing that the item is fit for that particular purpose.
The fact that the seller KNEW (or should have known) of the illegal status of the vehicle and that it would NOT meet state emission testing, means the sale (even if it were 'as is') is invalid and the 'contract' is void.
OP... do yourself a favor and negotiate a settlement with the buyer. Either:
1) Bring the vehicle into code yourself, or
2) Compensate the buyer for the costs to have the vehicle brought 'into code', or
3) Refund the money and keep the vehicle.
If you don't, this could cost you far more than you realize.