Okay.. how much is this going to cost?
Fee Explained
Maybe grab a cup a coffee first? or Wine.
If you’re having trouble understanding how architects charge for design services, you’re not alone. Many people feel confused about how fees are established.
For full architectural design services, some might suggest design fees of 10-20% of construction cost for new construction and 15-20% for remodels.
We do things a little differently.
This page will cover the difference between various fee structures and which one is best for you and your project. But before we dive in, let’s explore why design fees can be so difficult to understand.
Design fees are determined not only by our experience and past history but also by project specifics. The following factors can significantly impact the fee structure and actual fee for any given project:
Percentage Based Fee
In percentage-based fee structures, fees are based on a specified percentage of the construction cost and are adjusted as the design is refined. The percentage is determined by the architect based on various factors. For residential projects, architectural fees typically range between 6% and 18% of the construction cost (which is different from the overall project cost).
Architects may have different fees associated with different project budgets, sizes, types, or scopes of services. The percentage you’re quoted may differ from that of another project because of differences in project specifics and level of involvement. Keep in mind that architects are in the service industry and that time equals money. If architects anticipate that a project will take longer, they will adjust their fees accordingly.
Why?
For full architectural services, architects generally prefer to charge percentage fees. Full services mean that they will be with you from start to finish (designing, advocating, and managing the project), which can sometimes take years to complete.
When?
If you’re looking for full architectural design services but haven’t yet determined the scope of the project or a realistic construction budget, the percentage-based method can be beneficial. This fee structure lets you set a percentage rate and then adjust the fees later as the project specifics become known.
Full Transparency:
It’s rare to know a realistic budget up front. Most people have an idea of what they’d like to spend, but they don’t know if that’s a reasonable budget or not. It’s hard to predict a budget without a set of drawings to estimate from. Estimating the construction cost is extremely difficult. Throughout the course of design, construction budgets can and do change. And in a percentage-based fee structure, that means the fees will change over time as the design is refined.
When you have a small project with a small budget or a remodel project, this method may not be the most suitable option. Due to economies of scale, there comes a point where the amount of work it takes to design, draw, and manage a project doesn’t correspond to the budget you’re spending.
Example Fee:
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Project Construction Cost = $500,000
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Negotiated Fee Percentage = 4%
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Architect Basic Fee = $20,000 (approx. 210 hours or 5 weeks at $95 / hr.)
Hourly
Rate
This concept is relatively simple. Architects have standard billing rates that they state in their contracts. They then invoice for their services based on the number of hours they work on your project multiplied by their hourly rates.
Depending on the project, location, and experience level of the design personnel doing the work, hourly rates can vary.
The hourly rates for licensed architects, interior designers and drafter can differ significantly based on their location and experience level. For example, in the US, licensed architects may charge anywhere from $80 to $250 per hour. In bigger cities with higher costs of living and high-profile names, hourly rates can be on the higher end of the spectrum. Intern architects would bill at a lower rate.
Why?
Hourly rate fee structures are preferred by architects because they know that they’ll be paid for all the work they do. There’s less guesswork and estimating involved in the amount of work or scope of services that they have to anticipate. Architects know that even if the scope changes or they find themselves spending more time on a particular aspect of the project than anticipated, they won’t lose money on the project.
When?
Hourly fee structures are a fair way to charge for services. You’re trading dollars for hours of work, which is typical of many service industries.
This method is best used when the scope of services is undetermined or there is a lot of uncertainty in the project, such as in scope, size, cost, duration, amount of design effort, or a confusing approvals process. If you haven’t quite determined how much involvement or work you want the architect to help with and you want the ability to add or eliminate services on a whim, this model is great because you don’t have to amend the contract when you change the scope of work.
Full Transparency
It’s common for clients to have a hard time imagining that it takes so many hours to complete a design that looks so “simple” and “straightforward” on a piece of paper. But in actuality, there is a lot of research, analysis, iteration, and thought that goes into the designs, most of which is hidden behind the scenes and doesn’t show up on the final drawings. Many architects feel compelled to either lower their hourly rates or not bill for all their hours just to get clients to agree to work with them.
And in both cases, it’s just not fair.
Example Fee:
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Pre-design meeting with Owner = 2 hours
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Planning and Programing = 52 hours
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Review site survey, codes and restrictions, create site plan and concept sketches = 40 hours
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Generate pre-design presentation = 10 hours
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Meet with Owner to review progress = 2 hours
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Schematic Design = 72 hours
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Incorporate Owner revisions, set up BIM model, create schematic floor plans, exterior elevations, material studies and various sketches = 60 hours
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Generate pre-design presentation = 10 hours
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Meet with Owner to review progress = 2 hours
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Design Development = 80 hours
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Incorporate Owner revisions, set up BIM model, create reflected ceiling plans, interior elevations, roof plans = 20 hours
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Refine exterior elevations, material studies and various sketches = 20 hours
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Add furniture and millwork to 3d model for Virtual Presentation = 20 hours
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Generate pre-design presentation = 18 hours
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Meet with Owner to review progress = 2 hours
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Construction Documents = 120 hours
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Incorporate Owner revisions, construction comments and reformat model from presentation to technical drawings = 26 hours
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Add construction notes, code research and coordinate with other consultants, such as civil, structural and septic engineers = 40 hours
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Wall sections, plan details, outlined specifications = 40 hours
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Mechanical and Electrical Plans = 8 hours
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Quality Review = 4 hours
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Meet with Owner to review progress = 2 hours
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Construction Administration = 40 hours
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Incorporate Permit review comments = 8 hours
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Five (5) Site visits with Owner = 10 hours
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Various coordination meetings with Contactor = 22 hours
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Approx. hours plus additional services = 400 hours
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Negotiated Fee Percentage = $95 / hr.
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Architect Basic Fee = $38,000
Fixed
Fee
When it comes to a lump sum or fixed fee contract, the architect agrees to a flat fee amount for the professional services rendered.
Why?
This fee structure is preferred by architects for smaller-scale projects. In smaller projects, whether the project is small or the scope of services is small, it’s easier to determine how much work is involved. There may not be as many programmatic elements to design for, or you may request only concept drawings. In either case, the services are a little more cut and dry, and the scope is more easily defined.
When?
When the project specifics and scope of services are known upfront, this method is best used. If you know which services you want help with and have a good idea of what you want out of your project, then an architect has a better idea of how much work they’ll need to do on the project and can reasonably estimate how much they’ll need to charge for the project.
Full Transparency
This method is popular because it allows people to know what they will ultimately pay in the end. It also incentivizes the architect to work efficiently to complete your project because their pay is based on a fixed amount regardless of how much time they spend on it.
On the otherhand, this may lead to a less than ideal situation when the architect realizes that the project is actually taking longer than expected and is running low on fees so they may become less engaged with the project because they can’t afford to spend that much more time on it.
This method’s challenge is that you must have all the project details figured out. An architect will rarely agree to a fixed fee contract when there is uncertainty in any aspect of the project.
Example Fee:
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Conceptual Design Package
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Site visit with Owner
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Review Survey
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Generate two (2) site schemes
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Conceptual floor plan for house and garage
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Review with Owner
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1 round of revisions
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Delivery Package
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Negotiated Basic Fee = $3,000 (approx. 31 hours at $95 / hr.)
Combination
Fee
When it comes to a combination fee structure, it combines aspects of more than one fee structure. For example, some phases or services might be provided at an hourly rate while others are provided at a fixed rate.
An example of this is when an architecture firm charges you a fixed fee for basic design services (because they can estimate the time involved in completing the services) and then an hourly rate for other additional services like casework detailing or product and material selections (because those services are harder to estimate the amount of time involved).
Why?
This fee structure is popular with architects because it offers flexibility and a safety net during the unpredictable phases of a project when there are many unknowns. It then provides standardized fee structures for the more predictable phases or services that most clients appreciate.
When?
Architects use this method mainly for full architectural design services when they provide all services for all phases of the design and construction process. Although it may seem complicated at first, once implemented, it is pretty straightforward and both clients and architects like it.
Full Transparency
The fee structure provides an ideal balance between flexibility and structure. It’s fair to both clients and architects while allowing architects to focus on their strengths.
Getting clients to accept this combination fee can be difficult. Although it may seem complex at first, most clients are more accepting when they understand the reasons behind the hybrid nature.
Once clients understand that there is a lot of uncertainty in some phases and that it’s hard for architects to estimate fees based on a moving target, they can understand why this model may be suggested.
At Motif, our fee is always negotiable. We tailor each proposal to our clients individual needs.
Wait one second!...
This is going to cost how much???
The best way for architects to charge for design services depends on the project. Each type of fee structure has its merits, its challenges, and its natural tendencies for best use.
There are many variables at play when it comes to designing your project. Your architect will suggest a fee structure that meets your needs in terms of fees, design quality, deliverables, and more.
I only need plans drawn up to get a permit. Can you help with that?
Sorry, we are not a drafting service. If you already have a completed design, we are not the right fit for you. Plus this gets into a grey area with copywrite issues.. which we don't take lightly.
We work collaboratively with our clients to create a design that is specific to their site while ensuring that it follows local building and zoning codes. Our design process is client-focused and ensures that we meet the needs of our clients.
Hmm... Its just drawings? Please explain your hourly rate.
It varies per project. For smaller projects, fees are often a fixed fee. Some projects are hourly if we cannot specifically define the scope or how many hours it will take us to do the project.
Also, even though we are a small, boutique firm.. we do have operational expenses. Other factors include the cost of overhead, like professional and general liability, various insurances, software licensing, office expenses, current economy, indirect expenses, profit, rent, utilities, travel and office equipment.
If drawings could draw themselves.. heck' were in the wrong business!
Your fee is just too high. I don't need an architect anyways. (ouch!)
Relatively speaking - we try to make our fee as fare as possible. In fact, we encourage negotiation from the beginning!
While we are not the least expensive - we're defiantly not the highest. For comparison, if we design your $500,000 custom home for $20,000, a good contractor will likely for ask 15-18% fee or $75-90,000. In other words, our fee is about the total cost of your kitchen and laundry room appliances. That's pretty small compared to the relative cost of the entire project.
Also, architects are uniquely trained and have the experience to take your project requirements (needs, wants, stylistic preferences, budget, timeframe, site characteristics, and local codes) and compose them into a cohesive, thoughtful, and unique home that is specific to you and your site and protects your financial investment.
In many cases, if you "don’t think" a licensed architect is needed from the get-go... then a drafter or builder my be a better fit for your project.
Okay great!
I understand the fee structure.
How do I pay for the services?
Retainer
Retainers, otherwise known as fees paid in advance to procure future work and services, are a standard and important part of doing business for architectural firms and service professionals in general. They are often the beginning of a beautiful fiduciary relationship between the architect and client.
Why?
Whether it is a new or an existing client, retainers allow you to begin a project with confidence. Even though most or all project costs and fees are pre-established within the project budget, retainers nonetheless give you the assurance that immediate costs are covered and some compensation for work is in hand.
When?
Upon acceptance of the final proposal. Congrats... this official kicks-off the projects!
Full Transparency
Smart architects keep a client retainer on hand to at least substantially cover the costs incurred during the most intensive billing period. Without this, architects put themselves in a financial risk.
Payments
Our proposals lay it out all out. We include a detailed invoice schedule and list of deliverables to expect at the end of each phase of the project. Depending on the project type, payments are due within 15-30 days of the invoice date.
How?
We utilize a secured, online platform to process invoice payments. Motif will never ask for financial information. We can also accept all major debit or credit card for a small processing fee. Payments may be split by multiple payments methods too.
When?
Each invoice schedule is tailored specifically to the project. Often, the structure is laid out like this:
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Pre-design meeting with Owner, Planning and Programing = Retainer Fee (10-25%)
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Schematic Design = Considered 25% of project completion (Invoiced at 25%)
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Design Development = Considered 50% of project completion (Invoiced at 50%)
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50% Construction Documents = Considered 75% of project completion (Invoiced at 75%)
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100% Construction Documents = Considered 100% of project completion (Invoiced at 100%)
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Construction Administration = Typically included in fee. Additional services are based upon the agreed hourly rate and invoiced at the end of each month.
Full Transparency
Some clients ask break down our invoices to smaller amounts. No biggie, we're happy to make special accommodations depending on the project type and relationship.
Lastly,
before we scare you off...
We do believe that working with the right architect through the entire process will get you the best outcome.
Our fee is a small part of your larger investment.
We also know that some people may not have the budget for the design fees, even though design professionals bring incredible value to a project.
We believe that working with an architect early on in the design process is the most valuable time. Even if you don’t have the budget for full architectural services, we can help you get the design concept nailed down.
Because we know how important it is to get the design right, we offer concept design services that make it easy to get the concept design figured out with an architect and then give you the freedom to do whatever you want afterwards, whether you want to hand them off to a draftsperson, designer, or builder to finish the project.
