Avoid bridging finance

When I eventually got to work one of my colleagues was thumping things about the office. She was grumpy. She’d recently moved into her new house, and as you'd imagine had been fairly happy about it. She bought it before selling her old place. Oops! It had sold soon after and the settlement dates seemed to be okay. But today something went wrong. She is now forced into bridging finance. I was almost in the same boat a few years ago.

The house in Tasmania I’d mentioned a few times earlier eventually sold, and of course we bought another in Melbourne. This house, as it happens. We nearly got into hot water in regard to the need for bridging finance.

We were living in rented accommodation in Melbourne. There were renters in our Tasmanian house. We had spotted the house we wanted to buy in Melbourne, and put a deposit on it. Being mindful that we had no money to cover the sale we arranged a 90 day period before settlement. The vendor was happy with this. Surely you can sell a house within 3 months. Surely there won’t be a problem there.

The tenants moved out of our Tassy house, and didn’t leave the place as well cared for as they moved in, but that’s another story. It was put up for auction, didn’t sell at auction, went on the market but things were slow, but in due course someone wanted it and it sold. Things were looking good. Then the problem hit us.

The purchase of our house was conditional on the sale of their property. There was a similar arrangement from the people who were buying theirs. There was a whole string of sales set to go through and the date was set, but somewhere in the chain of events someone was having trouble with their finances. Everything was in jeopardy.

The settlement date for our Melbourne house was now only a few weeks away. We had no money. We needed the sale of the Tassie house. I paid the bank manager a visit explaining the situation. He was reassuring saying everything would be okay, whatever that means. I began scouring the situations vacant columns to see what work was available on a casual basis. I could see myself working during the day in my regular job, and working in a service station during the evenings. The loan repayments would have been huge.

Settlement day was almost upon us. I was worried sick wondering how we might cope. Then on the day before settlement was scheduled we got a call from our agent in Tasmania that the finance for these people somewhere up the chain had worked out, and settlement was scheduled for the next day; the same day as settlement of our house was set to take place. What luck. What relief. It took a long time recover from the nervousness of it all. We promised ourselves never to let ourselves come close to that experience ever again.