How a #paperclip was traded for a #house

When Kyle MacDonald speaks about how he traded one red paperclip for a house, what really captures the audience’s attention is how the 32-year-old B.C. resident is able to ignite an idea and get people on side to achieve his goal.

His adventure in trading started out in July 2005, he told an audience at Vancouver Buildex 2012, a conference for Realtors, developers, architects, engineers and construction bosses.

After graduating university with a BA in geography that “you can’t do much with”, he traveled, fell in love with an airline attendant and moved to Quebec with her. He ended up schlepping refrigerators and stoves up mountains of stairs before he realized “this is not exactly what I want to do with my life.”

He sat pondering the question – what do I want to do? He wrote down all the things he had done, the great ideas, and out of the blue received an e-mail from an old school friend who reminded him of the kid’s game “Big and Better” they had played. A red paperclip on a white desk was staring at him, and, he thought, why not try to trade it for something bigger? The idea sparked, but then so did the reality of his situation – find a job.

Four months later, he had moved back home and was sitting at a table with his father when the red paperclip dropped from his wallet. MacDonald turned to Craigslist’s barter section and got his first trade – a fish-shaped pen.

What seemed like a kid’s game was taking on a new reality. When he met the two girls offering the pen for a paper clip, he took their picture and had fun with the meeting. What a great story to tell friends – that he traded a papercip for a fish pen. Then he traded the pen for a ceramic doorknob with a face on it that a couple’s son had made in school in Seattle. He had fun meeting the couple and “hung out at their house”. He took their picture, too.

Soon he had traded up to a camping stove, but trades started slowing down.

MacDonald realized that he needed a better means of reaching potential traders. He upgraded his website, calling it One Red Paperclip. Then he created a backdrop story to go with the trades. He put his name and number out on the Internet, despite being warned that people would call from all over at all times – even at night.

He traded the stove for a generator, the generator for a keg of beer and light-up Budweiser sign; a combo dubbed “instant party.” Michel Barrette, a Quebec TV and radio personality, offered “his worst snowmobile” and deal was forged.

After a great party, McDonald was on his way. Much of the success came from getting the news media’s attention. He posted the Barrette trade and within days, he had major TV outlets wanting to cover the trade.

Eventually a cube truck was traded for a recording contract, which was traded for a year’s free rent in a Phoenix home. Then a woman offered an afternoon with her boss. “Who’s your boss?” MacDonald queried. It turned out to be rock singer Alice Cooper. MacDonald and a giant red paperclip ended up on stage at a performance. But the Alice afternoon was traded to a photographer, who offered a Kiss snow-globe.

MacDonald was bombarded by website followers who criticized the trade. He showed comments to the Buildex audience on a screen with the final comment: “Dumbass”.

“It was mind-blowing how personal people took it,” he said.

Earlier in the trading session, MacDonald had fielded a call from actor Corbin Bernsen (best known for his work in LA Law) and didn’t realize who he was. When he later Googled him on the Internet, he discovered that Bernsen had 6,500 snow-globes. MacDonald called and asked if he had a Kiss snow-globe that lit up, and sent a picture. The star responded: “I don’t just want it – I need it.” Bernsen was willing to trade a part in his movie Donna on Demand.

That grabbed attention and an enterprising Saskatchewan economic development officer saw a great opportunity. Why not trade a house for the opportunity to hold auditions in Saskatchewan for the movie role? The home was a two-storey square building on the Main Street in Ripley, Sask. What occurred at the audition and housewarming was amazing as 1,000 Kipling residents turned out, along with 3,500 movie wannabees and lookie-loos from all across Canada and the U.S. and even from Europe. Twelve of the 14 previous traders were on hand including Bernsen. At the end of the house-warming party, MacDonald took a red paperclip, shaped it into a ring and proposed on stage to his girlfriend. Wild cheering broke out.

The couple stayed in the house for over a year with MacDonald penning a book about his adventures. He then donated the home to the town, to be used as a tourist attraction/café. Kipling also built the world’s biggest paperclip as another tourist feature.

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By Jean Sorensen | REM Online

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GTA condo market breaking records

The GTA condo market continues to shatter records with more sales, new projects and new units pushing their way into the stratosphere in the first quarter of 2012 than ever before, according to market research firm Urbanation.

Any “anxiety” about the health of the condo market, or fears a bubble is about to burst, did nothing to slow demand.

In fact, the year has started out even hotter than last, when the first quarter of 2011 kicked off what would turn out to be a record year for condo sales and construction across the GTA with some 28,000 new units sold by year end, according to statistics released Monday.

“There have been a few new projects opened that haven’t done so well, but nothing that says to me ‘this is it,’” says Ben Myers, pointing to prevalent fears — mainly among the media, he points out — that the GTA’s sizzling condo market is on the verge of a cool down. Myers is editor and executive vice president of the condo research firm.

“The probability of a market crash or major price correction is very small.”

Some 6,070 condos sold in the first three months of this year, up from the previous sales record of 5,415 units set in 2010, Urbanation says.

The number of active projects in the first quarter hit 338, up from last year’s 284.

But the number of “active” units — those in pre-construction sales, under construction or in newly constructed condo towers yet to be completely sold out — stood at almost 85,000 units in the first quarter, up from 73,643 during Q1 of 2011, says Myers, The average GTA condo now costs $393,000 and is 757 square feet in size. That’s down from 774 square feet and up in price from $372,000 a year ago, according to Urbanation.

Condos now cost an average of $519 per square foot across the GTA, up 8.1 per cent from a year ago.

The resale market has shown some signs of slowing, although Myers suspects that just means investors aren’t as jittery as the media about a potential meltdown in the market and are simply holding onto, and renting out their units, anticipating they will be worth more over time.

Resale condo values fell just slightly in Q1 to $396 per square foot, to first drop since the recession impacted Q1 2009, down from $400 per square foot at the end of 2011.

But, overall, the average resale price climbed almost 4 per cent during the first quarter over a year ago, up from $358,000 to $361,000.

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By Susan Pigg | The Toronto Star

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5 Bedroom, 2961 SF Home For Sale in Brampton

Double Door Entry Leads You Into This Stunning 5 Bedroom Home (All Large Bedrooms). This 2961 Sq. Ft. Home Is Freshly Painted Throughout. Master With 5 Pc Ensuite And Walk-In Closet. Formal Dining Room Is Perfect For Entertaining Family And Friends. Great Location In A Demand Area, Near Schools, Parks, Transit, Shopping And Highway.

Bedrooms: 5

Bathrooms: 4

Sq. Ft.: 2961

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To Book a showing, call 416-880-9661

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Mortgage lending change bill introduced

The federal government has moved to further tighten up mortgage lending and cool the overheated Canadian real estate market by effectively reining in the Canada Mortgage and Housing Corp.

What’s unclear is whether the move will throw a cold compress on Toronto’s feverish housing market or just mean there’s one more person keeping a close eye on its temperature.

Under a bill tabled Thursday, the Office of the Superintendent of Financial Institutions will be given oversight of CMHC, which now insures nearly 50 per cent of the $1.1 trillion in residential mortgage credit now outstanding in Canada.

“I’ve been concerned about the CMHC for some time in the sense that it’s become an important financial institution in Canada and it was not subject to the same supervision by the Office of the Superintendent of Financial Institutions,” Finance Minister Jim Flaherty told a news conference.

“So I think this is an important step forward.”

Flaherty made it clear he’s particularly concerned about the condo markets in Toronto, Vancouver and Montreal. The bill, which he’s been hinting at for weeks, is aimed at discouraging high-risk borrowing and reducing the risk to taxpayers if those major markets take a tumble.

It is inevitable that OSFI’s oversight of the CMHC will have at least some dampening effect on the housing market as more mortgage applications inevitably get rejected or subjected to scrutiny that has slipped over the last decade, says Ben Rabidoux, an analyst at M Hanson Advisors.

It would be “apocalypic” for the condo industry, but highly unlikely, if investors found themselves no longer backstopped on mortgages by CMHC, as some housing analysts have suggested could eventually happen, says Brian Persaud, a realtor and co-author of a book on condo investing.

Rabidoux agrees: “This is a credit-driven housing market and (Flaherty) is walking a tightrope when he tries to slowly rein it in and induce a soft landing, particularly when you see how reliant the economy is on this current housing boom.

“I think he is starting to get the sense, rightfully so, that a soft landing is not in the cards and, by passing the dirty work off to OSFI, he’s not the one seen to be responsible for it.”

But CIBC deputy chief economist Benjamin Tal predicts “the surprise will be how little this will change as far as the overall activity of CMHC goes,” calling the change of oversight as nothing more than “changing reporting lines.”

The amount CMHC insures has almost tripled just since 2000, from about $200 billion to $541 billion as of last September — so close to the $600 billion insurance cap set by Ottawa that it’s raised fears taxpayers could be left hugely exposed if prices start dropping and over-leveraged homeowners start defaulting on mortgages.

Just this week, the governor of the Bank of Canada warned Canadians, yet again, that household debt is a significant risk to the country’s economic health with interest rates bound to rise and house-prices-to-income levels running 35 per cent above historic levels.

The budget implementation bill tabled Thursday would also stop CMHC from providing insurance to major banks on conventional loans that aren’t considered high risk. That practice has become big business for CMHC and only served to boost the bottom lines of banks, says Rabidoux.

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Susan Pigg and Les Whittington | The Toronto Star

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How to get the best interest rates? Ask

You may think you’re getting the best interest rate on your savings account. But unless you keep checking to see if a higher rate comes along, you can be left behind.

Here’s a cautionary tale about Rob Young, who didn’t ask enough questions about his savings account at TD Canada Trust.

In July 2010, Young got a letter saying his TD Guaranteed Interest Account was being changed to an Everyday Savings Account. He would have the same account number and interest rate.

If this account no longer suited his needs, he could book a free assessment, he was told.

TD launched a new High Interest Savings Account at the same time, paying more than Young was getting. But he didn’t know about it until recently.

Why didn’t anyone say he could have boosted his savings rate? He had come into the branch many times to update his passbook or transfer money to his chequing account.

Young complained to the branch manager, who sent him charts showing the interest rates on both accounts for his $45,000 in savings.

On July 24, 2010, he was earning 0.85 per cent in annual interest with his Guaranteed Interest Account. His rate dropped to 0.75 per cent, 0.6 per cent and then to 0.5 per cent in April 2011, where it has stayed.

The High Interest Savings Account was paying 1.1 per cent in July 2010. The rate rose to 1.25 per cent in October 2010 — before going to 1.2 per cent in September 2011 and staying there.

Young was out one-quarter of a percentage point by staying with his original account. Later, he was out almost three-quarters of a percentage point.

“I made about $240 in interest last year, but could have made $540,” he told TD.

“Over the years, I’ve been asked about the $45,000. Would I like to make an appointment with a TD adviser for mutual funds? But I’ve never been told about the high interest savings account.

“Why do I need to hear about it on the street? How do you think this made me feel? Will TD make up the difference since the account’s inception?”

Young wrote to TD chairman Brian Levitt, who acknowledged his email but offered no reimbursement. The TD ombudsman also brushed him off.

“The decision to realign savings accounts was a bank-wide policy change implemented across the customer base and is therefore not within the mandate of the ombudsman’s office to review or change,” he was told.

TD said it was his responsibility to look for other savings opportunities or get a free assessment.

I believe that large companies should treat loyal customers with respect. And when Young wrote to me, I asked if he had other accounts at the bank.

Yes, he had a mortgage, which he planned to move at renewal. He’s been a customer for 25 years, starting in the Canada Trust days when he used a Johnny Cash machine.

“I enjoyed getting a yearly Christmas card. I enjoyed the fact that many tellers have known my name, known that my Mom or Dad had died. That is what a good banking relationship should be all about,” he said.

Bingo. TD spends millions of dollars to show it cares for clients. How can it turn down a request for a few hundred dollars by a longtime client who feels the bank ignored his needs?

Spokeswoman Barbara Timmins said the details of the new account hadn’t been finalized when the letters of notification were sent to GIA customers.

“We train our branch and phone staff to have regular conversations with customers to ensure they’re in the right account for their needs. We also provide full information about account options on our website (as well as in branch) and have an account selector tool.

“Unfortunately, the customer did not benefit from either. In this case, we are prepared to make a goodwill gesture to compensate him for the interest rate differential between the two accounts.”

Here’s my advice: Never assume you’re getting the best deal. New plans come out all the time — and companies don’t always tell you about them.

But if you miss out on a deal you think you deserved, play the loyalty card. Say you plan to leave and take your friends and family with you. That alone can turn the odds in your favour.

Story By Ellen Roseman | The Toronto Star

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