How to Hire the Right Architect: Comparing Fees
Learn common fee structures architects use and why you might choose one over another
Dylan Chappell
1 May 2014
Houzz Contributor and California Architect, Dylan Chappell is known for his sustainable and green approach to projects. Dylan is a South Coast native and serves on the Architectural Review Board for the County of Santa Barbara. (http://dylanchappell.com/)
Houzz Contributor and California Architect, Dylan Chappell is known for his sustainable... More
The only thing harder than choosing the right architect is understanding how architects charge.
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 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.
Percentage of construction cost. Architectural fees usually run between 8 and 15 percent of the cost of construction. Thus, on a project that costs $100,000 to build, the architectural fees would fall in the range of $8,000 to $15,000.
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.
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 disparity in fees is more often related to the level of services offered. The 8 percent fee usually includes basic architectural services or the minimum drawings required to obtain a building permit. For a small, simple project, this might be all you need. If you’re adding an extra bedroom or bathroom and you don’t want anything fancy, this might be sufficient.
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 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 15 percent fee typically covers full architectural services or the drawings required to get everything you want in your home and have it all worked out before construction begins. With this approach, you pay more upfront but have fewer surprise costs during construction. If you want your house to look like your favorite images on Houzz, you probably want this level of service.
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.
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.
Architects like charging a percentage of the construction cost because if the project scope changes (let’s say you decide to add an extra 500 square feet), their fee adjusts to compensate for the extra work.
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.
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.
Hourly. This is basically what it sounds like: You agree upon an hourly rate of service, and the architect charges you for the time spent working on your project. Architects usually like this type of arrangement, because they know they can bill for their time. The drawback for homeowners is they are on the hook for however many hours it takes to get the job done.
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.”
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.”
Charging hourly for the schematic design is another option. Once the schematic design is done, you should have a well-defined project scope and can agree upon a fixed fee for the remainder of the work.
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.)
Find a pro near you
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.)
Find a pro near you
Fixed fee. A fixed-fee contract basically states a set amount the architect will charge. Homeowners like fixed fees, because they know exactly how much to budget. Architects usually shy away from this fee structure until there is a clearly defined project to base it on.
How much you have to pay is important. But remember that home remodeling and construction are long processes that should be enjoyable, creative and respectful, and in the end should leave you with the perfect house for your family and lifestyle.
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.
More: How to Hire the Right Architect
Find architects and designers and see their portfolios
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.
More: How to Hire the Right Architect
Find architects and designers and see their portfolios
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I think you might be including land cost in your $3M house build, otherwise your house is costing $750/sf to build and that's extremely expensive. Using a reasonable construction cost of $300/sf, you'd be talking about a build cost of $1.2M in which case the low end of architectural fees would be $96K - not unusual for a custom home that's going to be complex and difficult to design and detail. Eliminating construction administration (not the same as construction management) as part of the architect's would not be recommended and not many architects would feel comfortable doing so since it compromises their liability. Hope that helps!
Many do not realize that luxury single family is the greatest liability for an architect - worse even than condos. People who spend millions on a home use lawyers for everything and tend to see other people responsible for issues they themselves may be responsible for. A tight contract and knowing how not to be intimidated by lawyers are important for architects doing these projects. Fee variations can be caused by engineering scope - i.e. is HVAC, plumbing, and electrical design included? Also on number of built-ins, degree of customizations - some ":custom" homes may share many details with others while others, especially those with little trim and tricky details obviously cost more to do. Also key is whether it is negotiated general contractor or bid. If the Architect and contractor know each other and have worked together, some of the work done for bid jobs to reduce change orders can be eliminated without undue risk to the client. Lastly, we do not charge expenses on top but include them in a flat fee. Those can add up - I find many people really do not know how to evaluate proposals against each other EVEN IF the work product is the same, which of course it never it. When we get beat on fee, almost always the final documents produced have little more detail than our preliminary ones, and that is a roadmap to less than optimal results and likely cost changes as clarifications are made.
I love comments on "reasonable building costs" at $300/sq.ft. I've never seen that price in the last twenty years, because each site - and the budget- is different- and this is the problem with calculating architect fees. It varies. You receive what you pay for.
Many architects use "standard hourly applications" or flat fees for services by each phase. How many hours are involved really depends on this time commitment, - nothing else. In high-end design work, which most architects do not cater to, there are exceptional services required - beyond a normal scope of work requirement. Some clients want just a car wash, while many others prefer full detailing.
Up front we offer a flat rate retainer $5k under which the site and design review are provided, a budget breakdown is offered, and a specific preliminary design is defined. Based on this, then an architect fee is disclosed at that time- without the obligation to proceed. If our client likes the work we've provided, they'll agree to the fee. If we don't like the client (this happens too!) we refer this client courteously to another service....If I am not appreciated for what we do, it's NOT worth our time to assist in that client's service.
In one of of my father's aphorisms for architects is this: "Choose your client well."
Using unreasonably low costs on construction budget, or in fees projected- leads to huge disappointment by the client in the services offered, or promised. Their trust in your ability suffers. I'm certain if you do not value your services appropriately, you are running a poor business, and this reflects both on your design and the end product. Another aphorism Alfred Browning Parker, FAIA (1920-2012) offered architects is:
"Get paid for what the value of your work is worth."
Discussing YOUR FEES here is a poor start.