The real estate industry is recoiling from new software at the Register of Deeds (ROD) office that they say is a greater cost for less service. The old system was vulnerable to failing, which prompted the change, and county officials are trying to navigate budget estimates with the new fee structure.
Meanwhile, title companies, appraisers, and real estate agents have started passing those costs on to the consumer, potentially leading to a few hundred dollars in additional costs for a home buyer.
“We basically went backwards for increased costs,” said MaryKay Shumway, president of the Door County Board of Realtors. “We all have paid, and are willing to pay, something that is reasonable.”
“It’s our opinion that this has really been screwed up badly,” said Bob Starr of ERA Starr Realty at the Jan. 9 Land Information Council meeting.
The ROD implemented a new system in August 2017 that came with a new fee structure for users. To access a deed, someone can go online and pay $6.95 per transaction. Businesses that frequently use the system also have the option of paying a flat rate for a number of minutes an individual employee can use the system. Printing the records comes at an additional fee, as dictated by state law.
For frequent users such as real estate agents, title companies, appraisers and attorneys, the new fee structure meant an increase in their costs. The previous system came with a flat rate of approximately $300 per month for unlimited use.
ROD department head Carey Petersilka said she understands the concern about the higher fees.
“I agree it’s sticker shock,” said Petersilka. “That $300 a month that some of those companies used to pay was the same amount of money prior to me coming here in 2004.”
She said the department held a presentation on the new system before it was launched but no one showed up. She also said the list of letters in opposition to the system that Starr read at the Jan. 9 meeting was the first organized complaint she had heard since the system was launched in August.
Those wishing to access deeds are still able to get them for free by calling or visiting the ROD office or using the state Department of Revenue (DOR) site, although users said the DOR site is cumbersome and only goes back to 2009.
Appraiser Daniel Lenius has taken to calling the office, which could mean half-a-dozen inquiries per appraisal.
“It takes a considerable amount of time,” said Lenius. “It becomes difficult if it is after hours.”
A portion of the increased fees fund the new software system, which all agree needed to be addressed. Two programmers in the county’s IT department created the previous system. Both of those programmers no longer work for the county, leaving the system vulnerable if anything went wrong. The new system is used by approximately half of the counties in Wisconsin.
But with increased fees, those using the system want to know where the additional revenue is going.
“What we’re paying, it’s increased substantially and I’m not sure exactly why,” said Holly Tlachac of Peninsula Title.
“We do have more revenue coming in because we have more users,” said Petersilka. “Our fees have increased and I will say that we are making more revenue on our fees.”
In setting the fee structure for the new system, Petersilka mirrored the fees from Waushara County in central Wisconsin, which is a comparable size to Door County. At the Jan. 9 meeting, Starr asked that fees be based on Door County’s expenditures, not another county’s fee structure.
The ROD has always brought in more revenue than its expenditures, which includes maintenance of software, supporting the land records office and payments to the state. ROD’s profit goes into the county’s general fund, which has been the case since before the new fee structure.
“There is revenue that’s brought in from our department that’s used to manage the bottom line of the county,” said Petersilka.
“Many of the costs, the overhead costs, do not get passed on to those departments,” said Finance Director Mark Janiak of the ROD department.
Each summer, Petersilka submits the estimated revenue for the office for the following year’s budget.
“At that point in time, the new system wasn’t even all the way up and running,” said Janiak. “Any projections would likely have been on the conservative side.”
Petersilka submitted revenue projections in line with the past two years of estimates and the most recent available actual revenue data from 2016. As the department better understands how the new fee structure impacts revenue, Petersilka said they may be able to revise the fee structure after consulting with Janiak and the county administrator.
“I would submit it’s more appropriate to establish what a cost is going to be and base the fees on that,” said Starr.