Why is it so hard to know what you can expect to pay before you begin? What’s the difference between an hourly rate, a fixed fee and a percentage of the construction cost? And, more important, which one is best for your project and your bottom line?
While there’s no one-size-fits-all answer to these questions, with some basic understanding of architectural fees, you should be able to devise an apples-to-apples comparison when one architect give you a proposal based on an hourly fee and another proposes a percentage based on the cost of construction.
Why the big range? Some of it has to do with how well established the firm is, how large it is, how high its overhead is and, frankly, how much cachet it has.
A young architect who’s just building a practice may charge only 10 percent because he or she doesn’t have a name yet. But you might get better service than at a large, hotshot firm charging 14 percent, because the outcome is more important to the young architect’s career than the bottom line. On the other hand, the hotshot firm might do a better job, because it’s more experienced.
The benefit to paying less upfront is just that: paying less in the beginning. The downside is that it leaves a lot of decisions unanswered until construction begins. This usually causes more change orders during construction, because work has to be redone to accommodate new ideas, and sometimes you may not be able to get what you want, because it’s too cost prohibitive by the time you make a decision. That all means paying more money during construction.
The main thing to remember is that there are different levels of service. When securing competitive bids, ask what services are included — and excluded — in the firm’s fee, so you are comparing apples to apples.
Some homeowners might not like this fee structure, because they think it incentivizes architects to design more expensive homes. One way to avoid this is to establish a project budget upfront.
There are a couple ways to control the amount of hours worked. You can add a not-to-exceed amount in the contract, or a not-to-exceed percentage of the construction cost.
Here’s an example of what a not-to-exceed clause might say:
“The total fees for work will be based on the actual time spent and billed on a time-and-materials basis. Compensation for the scope of work shall not exceed the sum of $4,000, plus expenses and approved adjustments. Statements based on the work completed shall be sent on a bimonthly basis and are due within 15 days.”
As with most industries, hourly rates can vary significantly. Just as you can pay $200 to get your hair cut in a salon or pay $15 to have it done at Fantastic Sam’s, you can pay different hourly fees for architects based on quality and reputation.
If you’re looking for the equivalent of salon-style architectural services, it’s not uncommon to pay $80 per hour for a drafter and up to $150 or more per hour to work with a firm’s principal. The cost for a project architect, associate principal or designer will fall somewhere between those extremes. (Costs may vary widely by region.)
Do you have a question about how much architects charge? Have you had a good or bad experience with one fee structure versus another? Please share details and ask questions below.