I have a pistol I want to sell a friend. Both of us live in VA (me spotsylvania county   He lives in Henrico county)  How do I legally transfer the pistol into his name. He called Green Top and they said we needed to call the ATF. He has a clean background as do I, so the background check is not a problem. I was under the impression that a transfer could be made through a firearms dealer for a charge of about $20. Any help would be greatly appreciated.

1. He hands you the money.
2. You hand him the gun.

No one needs to be involved in a private face-to-face transaction in Virginia besides the seller and the buyer.  There's no need for a transfer, forms, background check, nothing.

What METT-T said, plus a thousand.  You are not a dealer.  You are a private citizen exercising your right to dispose of personal property as you see fit.  No ID checks, no criminal checks are required.  You could get a bill of sale but it is not necessary.
As far as Greentop is concerned, they should already know the above.  

I believe for it to be a lawfully FTF, you have to verify the buyer lives in VA.   IE look at his drivers license.  

Thanks everyone, that seems very easy.

Verify residency (driver's license) and if you have any doubts, you might want to verify nationality as well. It's never been an issue for me, the few FTF deals I've done, I knew the people were U.S. citizens.