re: Legaility question regarding selling a house for more than its worth

My point is that if you figure out an acceptable payment, and number of payments, then you can state the purchase price and interest rate at specific values that avoid the appearance of usury. The only adverse consequences are the tax implications for the buyer and seller. The sales price may be higher than the seller would like, and result in capital gain from the sale. But that would also mean less interest income to recognize over the life of the loan. For the buyer, he would probably get more cost basis in the property and less deductible interest expense over the life of the loan.