Increased house price for cash trade?

[Dax Kirkwood]

Hi all, I have a naive question.

I'm looking at a house for sale by owner, who I know. No real estate agents on either side. Seller wants $425k, house appraised at $440k, but needs a few minor repairs. Is it possible/legal/sensible to get a larger loan for the house, $440k, in trade for $15k cash from the seller? I know they could pay my closing costs, but mine are minimal.

Thanks for your thoughts.