The previous owner had just sold the aircraft and had moved it on a trailer, with the wings removed, to the new owner. After the wings were re-installed, the previous owner flew the aircraft to demonstrate the handling characteristics. The next flight was flown by an associate of the new owner. After the pilot took off, he was flying in the vicinity of the airport. A witness reported that the aircraft was going downwind in straight and level flight at about 700 to 900 ft, when it went into a right turn, then entered a spin or spiral. Another witness reported that the right wing and nose dropped, the plane began a right spiraling descent, and after losing about 200 to 300 ft, it entered a spin and crashed. The pilot's wife stated he had suffered a head injury in January 1981, and subsequently had some spells of dizziness, but had improved. He also had recent surgery to remove his appendix, and reportedly, had not yet resumed his normal work. Nearly 2 years before, he had a high triglyceride level, but no heart problem was verified.