Now, let me give you an example where it is not the case that you always have to do 50-50. You should at least know what 50 percent of the pie looks like and you need some explaining to do if you take in less than half of the pie so So I try use examples from my own life and the most recent one was my kids and I bought a brownstone in Bed-Stuy. One of the things that New York does is they have very high taxes when you have a mortgage. You might not believe this but essentially it's 1.9 something, let's call it two. They charge you two percent of the amount of money you're taking on a mortgage. It's like two points. It turns out the seller. Thousands of dollars. The seller has to also pay half a percent to New York State taxes. Well, there's something called a CEMA, consolidation, extension, mortgage, something, and if the seller has a mortgage, what you can do is say when I'm buying the house I can take over that person's mortgage and essentially pay less for the house, but take on that person's debt. It has taxes [inaudible]. In this particular case, the seller had $500,000 on mortgage. So what it would mean is I would pay $500,000 less for the house and I would accept his mortgage. As a result of that, I didn't have to pay a two percent tax on that part of the mortgage because it was already out there. Save a thousand bucks. No. Two percent on 500,000? Ten thousand dollars. Ten thousand. Ten thousand dollars. He would save half of percent on 500,000. Wow, taxes are huge on this. Yes, insane. So he would save- I was like a couple of thousand, right? No. He would save 2,500. Wow. So I proposed that we do the CEMA. In order to do it, he had to give his bank authorization to transfer the mortgage to me. He was totally unaware of how the CEMA works and what it's about and so he signed the form and we get to closing. For the first time, he discovers that he's about to save $2,500. He is so happy because he had no idea that he was going to save his half a percent on the five million. In fact, when my lawyer points this out to him, he's so happy about it. In the 500,000? On the 500,000 part, yeah. He's so happy about it. He offers to split it with me. So never mind that I'm getting the 10,000. I would take that. I was going to get half of the 2500. No. I said no, that's okay, whatever. Then it turns out at this point he decides he's going to do some research on this and discovers that, lo and behold, I'm saving $10,000 and he's a little- He's a little annoyed now. He wants half of that. He wants half of that. Essentially, the challenge is that the world had made this division where I was going to get four times as much as he was because I was going to save two percent. I see. He was going to save half a percent, but there was really no reason why we couldn't undo it. It's like proportional division by default in some sense. Yes, well, a arbitrary proportion, two percent versus a half because there was the buyer tax and the seller tax. But the fact is the pie here was 12,500. I had no way of saving it without him and he had no way of getting it without me. He needed me to take out a mortgage and I needed him to sign his mortgage over to my bank. So had we discussed this up front, there's no question that we would have done the 12 and a half divided by two. On the other end, and let me say that when we go in one day, if we ever sell our place, we're going to discuss this up front with the next buyer, so that we're not just going to get the half a percent, we will get half of the two and a half. The idea is that he allowed this non-even division because he wasn't thinking about it and I hadn't brought it up but it was really unpleasant because essentially he realized that it was unfair. So I would say that I also felt a little bad about it. On the other hand, I actually had done some of the work in order to get the CEMA and also I was thinking about whether or not to get a mortgage or not and it turns out I had the ability to do this not through a mortgage, but possibly through essentially a stock margin loan and that seem a difference actually helped tilt things over. So there were arguments for why it shouldn't be divided evenly. He doesn't have another buyer on the hook right now. So we we're clearly going to finish this transaction. There was no doubt about that. The question is what to do here? So it's possible to get more than half. On the other hand, to the extent the other party is initially unaware, but then they ultimately figure it out, there could be a price to pay. Don't take less than half, but maybe even don't take more than half sometimes. There's dangers there. There can be some dangers. Yeah.
