Understanding Easements, Rights-of-Way and Their Effect on You and Your Property Value

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Understanding Easements, Rights-of-Way and Their Effect on You and Your Property Value written by RIKI MARKOWITZ An easement is the legal right of another person or entity to use part of your property. Without understanding what an easement is and how it affects homeowners, it can sound worse than it really is. But for some homebuyers, receiving a survey report that reveals a previously unknown easement can have disastrous implications.

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Most properties in Central Texas — and around the country, for that matter — have some type of easement. Whether it’s a legal agreement granting a utility company permission to erect power lines above ground or sewer lines underneath, without these arrangements, homeowners everywhere, from cities to suburbs and rural dwellers alike wouldn’t easily have access to power, telephone landlines, clean water, gas, cable, wifi and many other mainstays of modern life. The reason why it’s important for real estate professionals to know what easements are and how the agreements work is because it’s just one more part of the pre-closing process that many prospective homebuyers in and around Austin are relinquishing in their effort to outbid the competition. Susan Horton, 2021 president of the Austin Board of REALTORS® (ABoR), worries for agents and their clients right now. “In this hot market, buyers are waiving everything. They’re waiving their right to cancel because of an appraisal, they’re waiving it because of a survey, they’re waiving the opportunity to get the home inspected,” she says. Another downside to buyers of giving up pre-closing rights so that they can secure the purchase of a property in Austin is finding out about easements after it’s too late.

ers from using their property the way they want to, making it one of the most critical rights homebuyers are forfeiting, says Horton. If a buyer yields his or her right to an inspection, she or he might find out the house needs a new roof or new plumbing. That can cost a lot of money. But if there’s a drainage easement behind the house, it can prevent the new owners from putting an underground pool in their yard. If a property has a livestock restriction and that’s the sole reason a buyer chose that property, there’s no easy path for backing out of the transaction. Horton has experience with restrictive easements. But that was a long time ago before buy-

Certain types of easements can prevent own-

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Austin Board of REALTORS®

Broker Resources That Keep You on Top in Today’s Market As a broker and business owner, I know firsthand how hard it can be to know you’re doing everything you can for your agents. You’re constantly asking yourself questions such as: “Do my agents have what they need to thrive in their careers?” “Are we on top of the latest changes in the industry?”

SUSAN HORTON

2021 PRESIDENT

“Do I have any blind spots in my business operations?” If you’re a smaller brokerage, finding and maintaining the resources needed to manage risk and keep your business, your agents and your clients protected is an additional challenge, especially when the speed and complexity of today’s housing market make those risks greater than ever. The Austin Board of REALTORS® is here to help. This year, ABoR has launched a new series of Broker Toolkits designed to address these resource gaps in your business operations and help you and your agents stay ahead of the rapid changes in our marketplace. Each toolkit includes expert guidance specifically for brokers as well as readyto-share resources for your agents. Here’s a brief overview of two of the Broker Toolkits we have released so far:

Broker Toolkit: Code of Conduct + Nondiscrimination and Anti-Harassment Policy In the last year, our industry has received an increasing number of complaints at the local and state levels about REALTORS® posting discriminatory speech and conduct online, especially on social media. Our Diversity Committee tackled this issue head-on, collaborating with ABoR legal counsel to develop a series of model policies that help brokers prevent and address complaints associated with harassment, discrimination and racism. Our Broker Toolkit: Code of Conduct + Nondiscrimination and Anti-Harassment Policy provides clear and specific examples of agent conduct requirements, as well as harassing and discrimi-

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natory behavior. The policies also clarify who is subject to following the guidelines and outline investigation processes and disciplinary actions to be consistent in how issues are addressed within the brokerage. Regardless of whether ABoR’s model policies are a fit for your brokerage, it’s critical that brokers have policies in place that address agent conduct, harassment and discrimination and regularly train their agents and staff on these policies utilizing your policies in onboarding training for new hires and an annual review of brokerage policies for one’s entire office.

Championing Diversity, Equity, and Inclusion This inaugural Broker Toolkit is the latest initiative by ABoR and our Diversity Committee to champion equity and inclusion and end discrimination in our marketplace. This fall, the Diversity Committee will be developing a follow-up report to our inaugural 2019 ABoR Diversity Report, established baselines, benchmarks and strategies building a REALTOR® community that mirrors the rich diversity of the Central Texas region and the clients we serve every day. In addition, ABoR has partnered with Leadership Austin to develop a series of articles that help foster inclusive conversations, including Leading Courageous Conversations to Level-Setting Our Dialogue. We hope you will join us in championing equity and inclusion in real estate by sharing some of these DEI resources, which you can find in the Document Library on ABoR.com.

head-on, including: • Top Five Best Practices for Brokers Right Now • Top 10 Issues Agents are Experiencing in the Market • Property Showing Guidance for a LightningFast Market • MLS Training Resources for Buyer’s Agents

Don’t Forget About These Risk Management Resources Texas REALTORS® Legal Hotline & Online Resources: The Texas REALTORS® Legal Hotline (800-873-9155) is an incredible resource. Agents and brokers can call Monday-Friday, 9 a.m. to 4 p.m. to speak directly with a real estate attorney. In addition, the Legal & Ethics section on TexasRealEstate.com has searchable case studies and model policies for brokers. Your Brokerage’s Legal Counsel: Brokers, if the only time you engage your legal counsel is when a problem arises, you can be putting your business at risk. When industry regulations shift or new guidance is released, be proactive about engaging your legal counsel to ensure your brokerage practices and policies are up to date.

Coming in July: Broker Toolkit for Changing ACTRIS MLS Enforcement Policies

Broker Toolkit: Managing Risk in Today’s Housing Market

Next month, ABoR will be releasing a third Broker Toolkit that will help brokers educate their agents on the upcoming changes to ACTRIS MLS enforcement policies that will take effect this August. The Broker Toolkit include shareable resources that break down each of the changes and each step in the new enforcement process.

In May, ABoR released its second Broker Toolkit: Managing Risk in Today’s Housing Market. Developed in direct response to the concerns ABoR hears from the broker community daily on the issues and obstacles REALTORS® are experiencing in the field, this toolkit includes a series of resources and best practices that can help you tackle emerging risks in today’s housing market

Amidst continual industry change, limited resources and dwindling attention spans, I hope these Broker Toolkits not only help bring brokers peace of mind but empower all agents to help foster a more cooperative and professional marketplace. You can download all Broker Toolkits and more broker-only resources at ABoR.com/ BrokerToolkit.


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HBA of Greater Austin

The 87th Texas Legislature Is in Its Final Days The 87th Legislative Session adjourned “Sine Die” on May 31. The Texas Legislature meets for 140 days every two years to conduct the business of the state. The Legislature is required by the Texas Constitution to pass a budget for the next two years, but thousands of other bills are proposed each session, with only about one out of five passing. This session is no different, although several high-priority legislative items were unique to this session, including the ongoing COVID-19 pandemic and devastating winter storms.

CHAD DURHAM

2021 PRESIDENT

Each session, many bills affect the home building industry — bills tracked by our friends at the Texas Association of Builders number in the hundreds, some that would improve our industry, but many that would be detrimental. Fortunately, as we neared the end of the session, many of those “bad bills” have been caught on the wrong side of legislative deadlines, essentially “killing” the bills (although no bill is dead until the Legislature finally adjourns). Below are highlights of some of the important bills that were working their way through the legislative process: • HB 738 by Rep. Dennis Paul — This bill requires that cities update their building codes to at least the 2012 International Code Council codes. Some cities are operating on codes from 2001 and this bill would force those cities to modernize their code. The bill has passed out of the Senate and is on its way back to the House for final review before heading to the Governor’s desk to be signed. • HB 3422 by Rep. Geanie Morrison — This bill increases penalties for scam contractors. After any major disaster, there is a flurry of fly-by-night contractors who take deposits from unsuspecting homeowners and then disappear before the work ever begins. This bill will increase penalties on those scam businesses. The bill has been referred to the Senate Committee on

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• SB 877 by Sen. Kelly Hancock — This bill allows for the use of thirdparty inspectors during times of declared disaster. As we saw during the peak of the COVID-19 pandemic, many city inspection departments were unable to operate at full capacity, leaving thousands of homes waiting for inspections before homeowners could move in. This bill was passed out of the Senate and is waiting to be voted on by the entire house. • SB 1947 by Sen. Drew Springer — This bill will require a city to approve an application within a 45-day period (which is current law) and prohibits a city from requiring that an applicant waive their right to the 45-day timeline. Although cities are required by law to approve the permit within 45 days, many cities will require waivers or simply not adhere to the timeline. This bill has been voted out of the Senate and now heads to the House Committee on Land & Resource Management to be swapped out with its house bill companion, HB 2590 by Rep. Jeff Leach. These are a few of the bills that affect our industry. There are many other bills, both good and bad, impacting our industry that will not be signed into law. Oftentimes, these bills are multi-session efforts and could potentially be refiled and debated in future sessions. The HBA’s advocacy team will continue to work hard and represent our members at the city and county level, as well as the Texas Capitol in cooperation with our state counterpart, the Texas Association of Builders. Advocacy is a core tenant of our association and a tremendous benefit to our members. You can learn more about our advocacy efforts at https://www. hbaaustin.com/advocacy/.

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WCREALTORS.org

KRISTON WOOD

2021 PRESIDENT

Open Houses: Making the Best Experience For All Driving around on a Saturday morning, heading home from grabbing that hot cup of coffee, the client looks over and sees the signs… OPEN HOUSE. They quickly think, “I could just run in and check it out” or “I LOVE this neighborhood, I wonder if this house could be the one” or maybe, “I have to tour this house, it’s around the corner from mine and I have to see the updates they have done.” Resale homes and new construction homes alike find themselves busy with the foot traffic of eager buyers and future sellers looking to get a grasp on the local market. Buyers are back out shopping and are more serious than ever. Attendees differ in their search approach. Most are just beginning their search, some are looking to see how their home compares in updates and price or there are those who are just picking up design ideas. Some are open house pros and have seen every possible home that pops up on their app; they know the drill and make their tours quick. To make the best of your open house experience and theirs, consider the following tips:

Prepare to Engage Whether they are just beginning their search or are looking to list their home for sale soon, as the REALTOR® holding the home open, you should have a plethora of information at hand to offer from neighborhood amenities, school guides to local shopping and entertainment information. Most of all you offer information on the home itself, such as the time on market, if any offers have been made and details about updates to the home. Some attendees will use this time to interview a REALTOR® that they find especially thorough. They will get a sense of how you will interact with them and potential buyers/ sellers on the other side of a deal, how much effort you have put into this event, how well your marketing worked, and the overall service you offer.

Items to Prepare

• An MLS sheet for data (use as your cheat sheet) • Paper Towels/TP/Hand soap

Ask More, Talk Less Often, I find that buyers are eager to share as much information as they can to build rapport with the REALTOR® that is holding open the home, especially in a fast-moving market.

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Women’s Council of REALTORS, Austin Network

What Is an Easement and How Does it Affect Your Property? Easements allow a non-owner to have access to a certain portion of another’s property. Surveys should identify any easements attached to the property. Consider how if an easement’s placement might affect a potential buyer’s view of the value. Buyer’s may scarcely consider a utility easement. But other types of easements may be more noteworthy. Would a buyer offer the same amount for a lot which has a neighbor’s driveway easement” as they would offer for a property without the easement?

LORRIE KENNEDY

Many times, easements are granted to a utility company for the purpose of maintaining lines

2021 PRESIDENT

which cross multiple owners’ properties. An ingress/egress easement allows one property owner to travel to and from a property over the land(s) of another. When considering installing a gate, it may be necessary to make accommodations for the neighbor’s easement rights. When access is granted, stipulations are put into place as to how access is allowed, what maintenance is required or what improvements are allowed by either party. While the property owner may not be prohibited from placing a structure such as a jungle gym, tree or other improvement within the easement, the choice to do so should

be an educated choice. The utility company may require the removal of the improvement to access buried lines, for example. Sellers have an obligation to disclose this information to potential buyers. As REALTORS, we must help our clients understand the effects when listing or purchasing properties that have easements. This vital information could be detrimental to the success of our clients’ transactions. When questions arise regarding a specific easement, REALTORS should help their clients gather documentation such as the title policy and/ or survey to consult with a real estate attorney.

NAR News

NAR Applauds Latest White House Initiatives to Combat Housing Discrimination

Report Finds LGBTQ Buyers Purchasing Older, Smaller Homes Than Other Americans

National Association of Realtors® President Charlie Oppler issued the following statement today as President Joe Biden travels to Tulsa, Oklahoma, to mark the 100th anniversary of the Tulsa Race Massacre and unveil new initiatives designed to close racial wealth gaps. The administration’s proposals focus primarily on expanding opportunities for small business and home ownership. “The horrific acts of violence...

Home buyers from America’s LGBTQ community purchase older, smaller and less expensive homes than non-LGBTQ buyers, according to the 2021 Profile of LGBTQ Home Buyers and Sellers released today by the National Association of REALTORS®. Over the past 5 years, homes bought by LGBTQ buyers were 170 square feet smaller and 15 years older, typically, than those purchased by non-LGBTQ buyers...

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Easements: continued from front page

www.hollowslaketravis.com

ers were waiving their pre-closing rights. In one instance, a couple got into contract for more than an acre of land that they wanted to use for raising emus. But then the survey arrived and it revealed the existence of a livestock land restriction. If the same transaction was pursued in today’s real estate environment, it could be catastrophic for the client and agent. Fortunately, most easements are not that severely restrictive. There are three types of easements most brokers and agents encounter: right of way, utility and public. An easement appurtenant is for when a neighbor needs to pass through another’s property to access a driveway or roadway. Another example is when two neighbors share a driveway or one’s driveway is partially on the other’s property. The owner whose property is burdened can grant an easement that provides the neighbor permission to use the property. A utility easement is the most common type of easement most agents encounter. They’re granted to utility companies to install and maintain power lines, sewer pipes, telephone, television and wifi cables. These utilities may be overhead or underground.

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Overhead utilities can prevent property owners from building vertically within a certain square-footage of the easement area. Underground easements can prevent landowners from digging an underground pool, building a guest house or adding an addition onto the home. Both can prevent the property owner from building a fence, or at least dictate where the fence can or can’t go. Since you can see overhead utilities, they’re not usually a surprise when they show up on the survey report — though the amount of space protected by the easement may be. But underground easements can be a surprise. They’re more likely to affect clients who are desperate to buy into the Austin housing market and specifically those who waive

pre-closing contingencies for the chance to do just that. A public easement grants the general public or local residents rights of access. These are commonly seen in condo communities and those managed by homeowner’s associations. With public easements, members of the community are granted access to common areas such as lakes, tennis courts, pools, clubhouses and playgrounds, even if it means walking through someone else’s property. Easements are legal documents created when a property owner is approached by a neighbor or municipality requesting permission to use the land. According to the National Association of Realtors, “While the homeowner who originally grants the easement may be compensated, subsequent homeowners typically are not.” An “in gross” easement is only between the individuals who originated the agreement. When the owner sells the property, the new owner has no obligation to honor the contract. But an appurtenant easement does transfer to subsequent owners and locks them into the preexisting agreement, whether they like it or not. And even when a new owner of a property is not obliged to recognize an existing in-gross easement, the situation can still be problematic when he or she has to break the news to their new neighbor that the agreement that had been in place — anywhere from a few years to a few decades — will be dissolved. “That one sheet of paper that costs a little over $400 is so valuable,” says Horton, “I mean, who owns the tree that’s on the land? Unless you’ve got a survey, it may look like it’s on one side, but it might not be.” Horton and her ABoR colleagues can’t stress enough that a survey is critical for every real estate transaction. You really shouldn’t get into contract without one.

VIEW NEW FORMS BY CLICKING ON FORM NAME • Unimproved Property Contract • One to Four Family Residential Contract (Resale) • New Home Contract (Incomplete Construction) • New Home Contract (Complete Construction) • Farm and Ranch Contract • Residential Condominium Contract (Resale) • Addendum for Property Subject to Mandatory Membership in a Property Owners Association


CAPTURING REAL MOMENTS IN REAL ESTATE SINCE 1995

WCREALTORS Golf Tournament: Steve Deitrick and Greg Weeks of Giddens Homes

La Cima Fire Station Grand Opening: Chad Irving, Captain Greg Sherrill, Stephen Warne and Chris Jones

HBA & Santa Rita Ranch Benefit Home Groundbreaking

WE ARE

GROWING! Escrow Officers, Escrow Assistants, Sales Reps Expand your career with our business-enhancing products and services Savor the infusion of creative energy pervading our systems and processes Delight in our solution-driven approach, enhancing your ability to serve your customers

Come join the team that is building the title company of the future, now hiring at our Austin and Round Rock locations. ®

NORTH AUSTIN BRANCH 5608 Parkcrest Drive | Suite 150 Austin, TX 78731

512.302.3892

ROUND ROCK BRANCH 1 Chisholm Trail | Suite 3100 Round Rock, TX 78681

512.255.6550

VISIT OUR WEBSITE nat.com/Texas Austin.NAT ©2021 States Title Holding, Inc. and its subsidiaries. All Rights Reserved. | TX 21-17316 R 3.22.21

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Title is Title. But having a TRUSTWORTHY team is what makes all the difference. REALTORS® deserve a trustworthy partner who understands their needs. When you work with Southwestern Title Agency, your job is easier. REALTORS® enjoy:

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Women’s Council Mixer: Jennifer Lish of Nextage Lone Star Realty and Women’s Council Interim President Lorrie Kennedy of Classic Realty

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1111 N. IH 35, Suite 102 Round Rock, Texas 78664

Burgers and Root Beer: Curtis Wren and Alexis Michael, both of SouthStar Bank

HBA BBQ Ballyhoo: HBA CEO Taylor Jackson, Becky Collins and Mitch Schwartz

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JUNE 2021 | REALTYLINE.US


CAPTURING REAL MOMENTS IN REAL ESTATE SINCE 1995

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JUNE 2021

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WCREALTORS Golf Tournament: David Thomas, Tony Defoyd, H.T. Martinez and Billy Meyerdirk, all of Austin Inspection Services

Women’s Council Mixer: Carissa Chandler, Lorrie Kennedy, Aaron Lee, Kacey Taylor and Jennifer Gordon, all on the Women’s Council 2021 Interim Board

Keller Williams Cedar Park Red Day: Emily Dieckmann and Carl Diekmann, both of Keller Williams

Register with us at Realtyline.us/events or call (512) 514-3141

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JUNE 2021 | REALTYLINE.US

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CAPTURING REAL MOMENTS IN REAL ESTATE SINCE 1995

FEATURE STORY | Partners In Profile

by katie agness

[“

Giddens Homes

Even in these challenging times, Giddens Homes is not changing commission rates to REALTORS like some of our competition. We value the REALTOR’s role in our home building process.

[

Founded in 2011, Giddens Homes is a premier custom homebuilder that specializes in energy efficient, customizable homes with luxurious standard features and quality construction. Whether building on your own lot or choosing a customizable home within an established community, Giddens Homes homebuyers can expect a personalized customer service experience. “We build estate homes ranging from 2,200 square feet to over 4,200 square feet, with floor plans that fit all types of buyers,” says James Giddens, president of Giddens Homes. “We offer single story, one-and-a-half story and two-story homes with Hill Country and modern style exterior elevations.” As a local builder with longstanding knowledge of the market, Giddens Homes always strives to treat its customers and REALTORS like family. “Our building process is simple, and many REALTORS who bring clients to Giddens Homes come back to us with more homebuyer clients,” Giddens says. “Even in these challenging times, Giddens Homes is not changing commission rates to REALTORS like some of our competition. We value the REALTOR’s role in our home building process.” For homebuyers interested in building a custom estate home in the northwest suburbs of Austin, Giddens Homes has a Build on Your Lot program. Spanning the Central Texas area from the south in Cedar Park and Round Rock to northern areas

like Salado, the program gives homebuyers proven floor plans with a wide range of options and the opportunity to work with professional designers to create the perfect home. “We have six model homes where REALTORS can bring their clients to learn more about our products and the Build on Your Lot program,” says Giddens. “We currently have six model homes available throughout Liberty Hill, Leander, Georgetown and Jonestown.” In addition to the Build on Your Lot program, Giddens Homes also builds within communities throughout Central Texas, including Clearwater Ranch, Northgate Ranch and Santa Rita Ranch in Liberty Hill, The Bluffs in Leander, The Hollows on Lake Travis in Jonestown and The Oaks at Highland Village in GeorgeJames Giddens town. “Currently, we are sold out of homesites in these communities, but we will have new homes available throughout the remainder of the year and in 2022 coming to Santa Rita Ranch, The Bluffs, The Hollows on Lake Travis, Northgate Ranch and Clearwater Ranch,” Giddens says. Whether a first-time homebuyer with a family, empty-nesters or a multi-generational family, Giddens Homes helps guide homebuyers through their new home build with an easy step-by-step process. “We have our own design studio and an interior designer works with the homebuyer to help select design options for each buyer’s unique style and budget,” Giddens says. As many homebuyers are looking for additional space for a home office or extra family, Giddens Homes offers a plan for a separate casita that can be built at the same time as the main home. The plan offers homebuyers the ability to use the space as a mother-in-law suite, separate space for an adult child, pool house, game room or office space. “We are continually updating and improving our existing plans and adding new floor plans,” says Giddens. “Currently, we offer 28 different floor plans, each that can be customized to fit the homebuyer’s specific needs.”

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JUNE 2021

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Burgers and Root Beer: Courtney Schweitzer and Keely McCarthy, both of SouthStar Bank

WCREALTORS Golf Tournament: Realty Texas Team

YPC Happy Hour: Julia Vazquez of HBA and Brianna Booker

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JUNE 2021 | REALTYLINE.US


CAPTURING REAL MOMENTS IN REAL ESTATE SINCE 1995

JUNE 2021

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HBA BBQ Ballyhoo: Kelly Hughes and Savannah Carter

HBA & Santa Rita Ranch Benefit Home Groundbreaking: Jordan Hernandez, Regina Spurlock, Elizabeth Horne and Ed Horne, all of Santa Rita Ranch

WCREALTORS Golf Tournament: Laurel Brown of Freedom 512 Real Estate; Suzette Whitehead of Realty Texas; Amy Kozba and Avery Hutson, both of Better Life Realty

J O I N T H E L E A D E R S I N R E A L E S TAT E

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JUNE 2021 | REALTYLINE.US

JENNIFER LEWIS 512.901.9600

DIANE JOHNSON MALLORY MUNDY 512.448.4111


CAPTURING REAL MOMENTS IN REAL ESTATE SINCE 1995

WCREALTORS Golf Tournament: Kevin Morales of Realty Texas and Cheryl Scully of Austin Title

YPC Happy Hour: David Glenn of HBA, Katrina Pitre and HBA President Chad Durham

Keller Williams Cedar Park Red Day

JUNE 2021

| REALTYLINE.US

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SouthStar Bank Small Business Lunch: SouthStar Bank - Leander Staff

Keller Williams Cedar Park Red Day: Sherry Payne, Kaylee Smythe, Travis and Derek Smythe, all of Keller Williams

WCREALTORS Golf Tournament: Victor Henry

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JUNE 2021 | REALTYLINE.US

The Bluffs | Clearwater Ranch | Northgate Ranch Santa Rita Ranch | The Oaks at Highland Village


CAPTURING REAL MOMENTS IN REAL ESTATE SINCE 1995

SouthStar Bank Small Business Lunch: Steve Huddleston, Derek Kapavik, Nolan Johnson and Allen Strickland, all of SouthStar Bank

WCREALTORS Golf Tournament: Heather Bonamo, Natasha McKenzie and Candace Stone, all of WCREALTORS

Women’s Council Mixer: Dwayne Stewart and Kristin Lancaster of Nextage Lone Star Realty

JUNE 2021

| REALTYLINE.US

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CREATING COMMUNITY ONE CLOSING AT A TIME EXCELLEN CE IS TH E H E A R T OF H E R I TA G E | T H R E E OFFI C E S TO S E R V E YO U TARRYTOWN

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JUNE 2021 | REALTYLINE.US

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