Let's step away from architectural discipline and discuss a pragmatic reality of the practice. There's an inevitable moment 10-15 minutes into greeting a new client (shortly after they joyfully relay their dreams for the project). We'll exchange a glance, a short pause, and I'll break the ice with the frozen gorilla in the room.
"So you need to know how much we cost, right?"
"yes", they'll reply sheepishly.
Unlike many services, price tags for architectural expertise aren't widely publicized, as it's a highly customized endeavor. Pricing and quality vary greatly and are subject to many factors, but there are three common strategies we'll begin to demystify - each with its own set of benefits and risks for both the owner and architect. Understanding your architect's approach to providing a proposal for services will help you cater his or her offerings to your needs, and compare various proposals on an equal playing field. It goes without saying that the architect's collaborative personality, reputation, and his or her experience and design expertise play a large role in the decision making process. Each owner must weigh his or her willingness to pay for service against the quality of work they wish to receive. Someone will ALWAYS be cheaper. The question is, "why?".
Let's assume, for the sake of comparison, that you're seeking full services including Schematic Design, Permitting Documents, Construction Documents, Specifications, etc. Engineering and other consultant fees are NOT included in these figures. At a minimum, a structural engineer will generally need to be part of your team for load calculations and framing plans. In many jurisdictions, though not all, your residential permit drawings must bear the seal and signature of a licensed architect and/or engineer. Lastly, let's assume you're hiring a licensed architect for a residential project. We mean no ill will towards our drafting and interior design colleagues, but those are distinct services, and in the interest of a level playing field we must provide a baseline standard of expertise.
1 - Hourly Billing
This method is frequently deployed for smaller projects, or projects on which the scope is subject to change. The approach is beneficial to the architect, to whom it guarantees payment for all work furnished, but is less advantageous to owners, who (rightfully so) are skeptical of signing a contract with a fluid ceiling. Frequently, a "not to exceed" number is placed in the contract by the architect as a means of protecting the owner from payments beyond their means. Billable rates vary greatly, from $75/hour for a draftsperson or intern to upwards of $250/hour for a high level design Principal (As an aside, EN Architects charges $90/hour for our Principals, as our small size allows us to keep multipliers low and overhead down [hey, we get to plug ourselves in our own article.]). These figures can quickly add up for a home owner, whose three-week design project for a kitchen expansion mushrooms into an $9,000 bill for service. Unless you simply need to consult an architect for a limited time, we recommend steering clear of hourly service contracts in most cases.
2 - Percentage of Construction Cost
This method has been industry standard for years, though it's popularity is declining in favor of our third approach (stay tuned). A common range for architectural fees within this approach is 8-15%. Experience of the firm, reputation for design excellence, region, and scale of the project all factor into the aforementioned spectrum. There is an economy of scale to larger projects that allows for a slightly lower percentage fee, while small additions and renovation work are typically upwards of 10%. (For the sake of this exercise we're sticking with residential figures, but very large projects can dip as low as 4-5%) The math is quite simple: if an architect charges 10%, your $100,000 addition will cost you $10,000 in architectural fees.
There are two soft spots in this approach, however. Foremost, more expensive doesn't always mean more complex. On the contrary, projects with a highly limited budget often require a more creative and time consuming solution from the architect, and thus the construction cost may be inversely related to design effort. The other hiccup is that owners seldom have their budgets fully cooked when seeking an architect. The architect's drawings are often the first means the owner has of procuring construction cost data, and the architect cannot draft an agreement based on numbers that are yet to exist. This method can be effective in the case of an owner with a firm budget and clear scope, but can otherwise be challenging.
3 - Fix Fee Based on Estimated Time
This hybrid technique is becoming more common, combining the effective attributes of both of the above mentioned approaches. The architect will (based on project scope and experience), multiply his or her rates by the number of hours anticipated to complete the project. This method is heavily reliant of past experience, but if done correctly can provide both the owner with the security of a fixed figure, and the architect with the guarantee of payment for work performed. For this to be solvent, it's crucial that a detailed contract is furnished to explain both what IS and IS NOT included in the scope of services, so that all parties understand the time commitment as it relates to estimated hours. Additional services can be listed as "line items" in the contract, should there be scope which remains unclear or yet to be determined. Oftentimes, the numbers furnished are similar to fixed fee figures, but fine-tuned to suit the needs of the specific project.
Each one of these agreement methods has its place in the spectrum of design services, and it's important to understand how your architect is procuring his or her figures as services relate to your project. These techniques may be hybridized even further in the case of more complex projects, particularly in the later phases of construction administration. Most importantly, never shy away from asking your architect for a thorough explanation of the cost.