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Architect Fee

amplaylife

This is maybe just a post venting some frustrations, but I'd like to hear what my fellow peers think.

I went to go meet with a potential client (concrete contractor by trade) about a residential project; ground up, 2,100 SF.  I proposed a fee for Architectural services and the client mentioned that my fee was too high - comparing it to an "older" fellow he has been working with on past projects who charges him $2.75 / SF for drawings....

Yes, $2.75 / SF! This is in Northern California.  How do you eat?  I honestly don't know why peers in our profession are doing jobs for this low of a price.  Thoughts? 

 
Dec 3, 19 5:11 pm
SpontaneousCombustion

Not to mention any names, but I still have a copy of a fee schedule that a regular on this forum once posted, with rates that start at 40 CENTS per square foot!  

A lot of people who play architect are subsidized in various ways.  It's their retirement hobby (sounds like the explanation here), or they're really making their money as contractors and the architectural work is offered in service of that, or they have a trust fund, or a spouse in a more lucrative career, or are freeloading off parents or other relatives.

Dec 3, 19 5:24 pm
RickB-Astoria

Some people are basically just drafting out CD sets based on some stock house plan or clippings or something the client hand him/her with the occasional modifications and code adjustments. This would only require about couple hours with the client at the beginning. Then about 40-80 hours of drafting and maybe an occassional few hours. So lets assume that's 50 to maybe 100 hours. How many square feet would this be? If this was say.... 3000 sq.ft. house, that would be about $8,250. That is effectively $82.50 an hour if they only spend 100 hours to deliver services. If they took 200 HOURS to deliver services for a house which is modest and this is a modest size house. A modest house is somewhere between 2500 and 3500 sq.ft. This isn't a 15,000 sq.ft. mansion, right?

Most unlicensed designers are likely to be sole proprietorship. Which means all income is their income and they are establishing separate commercial and personal bank accounts with separation of funds. In other words, they just collect the check and deposit it and use it for their personal living. They probably don't have much of any kind of overhead like renting property other than what they may do for home offices and using it in their taxes as write-offs. Bottom line: They would only need to make 1.5x to 2x what they would be earning as an employee to cover their SS and health insurance, taxes, utilities, and living expenses. Lets assume they'd get $20 to $25 an hour as an employee. 2x that would be $40 to $50 an hour.

If they spent 200 hours, they would be earning $41.25 an hour on designing a 3000 sq.ft. home. If they worked enough for 10 projects of same scale for the year. They would have earned $82,500 for the year. This is more than enough to live in some 1500-2500 sq.ft. house in rural areas of northern California. You have to look at the volume of work they are having and the amount of time they are investing in each project. I would expect that the person is spending about 100 to 300 billable hours per project. They aren't seeking to get rich or to build a corporation with a bunch of employees. They are happy at the scale they are working at. If the person is older and at an age to collect social security or other retirement payments, that may also reflect on the pay.


Dec 3, 19 5:59 pm
Non Sequitur

I'd like to see quality design and construction docs for a custom 2.5k size home done under 100hours and for $8k.

RickB-Astoria

Unlicensed designers are limited to designing with houses of conventional wood framed construction which means IRC. Since the project being worked on is 2100 sq.ft. That's $5775. If he keeps the hours down to 125 hours which is possible with conventional light wood construction under "IRC" code. If he or she works on 16 projects of this exact size a year.... that would amount to a $92.4K income. Making $60K to $100K a year is doable in parts of northern California. People live just fine up there in northern California with less than $75K a year. It's how you live.

Non Sequitur

Ricky, I said quality and custom. You’re describing basic barebones copy from a guide type work. See Thisisnotmyname’s post below. They make a much better point than I am.

RickB-Astoria

What you have to look at is how much of your fee is yours and how much of it is the consultants. As for the unlicensed designer, he or she is likely just billing for his or her services not that of consultants which would be billed as additional services or separately altogether. Most $/sq.ft. fees is simply the designer's service not that of engineering consultants or other consultants. If you are charging a percentage of construction, you are possibly comparing apples and oranges. Did you explain the break down of your services and which is for your services and which is your estimates for consultants such as engineers? For example, you might charge 6% of construction cost (just a guess). Lets assume $200 a sq.ft. for construction cost. That's $420,000 for construction cost. Your fee then might be $25.2K. Out of that $25,200 fee, the engineering consultants (structural and MEP) will probably take about 60% of it. Now, you are at ~$10K. In rural communities, fees are way lower than in bigger cities. There is a cultural difference. When you charge more than your client's net earning a year, they aren't going to pay you. Residential clients, usually, do not have the depth of financial resources as commercial or governmental organizations. You are talking about a modest middle income household client not the rich 1-2% of the population. In short, when you get out of the big cities, you basically have to take a cut in income. There is also a sort of anti-"rich man" cultural undertone in smaller rural communities which you will find in much of northern California north of SF/Sacramento area.

RickB-Astoria

NS, I was responding to the OP. I didn't even see your post until now.

Yes, I agree. You aren't going to find that with just 100 hours unless you a freakishly awesome but quality and custom is subjective. 

RickB-Astoria

What level of "quality" and "custom" does the client want to pay for? This may not be in agreement with what you think is 'quality' and 'custom'. To a person who literally been living in a shanty might find even the mediocre bland cookie cutter home as quality living. This can make residential work such a pain in the ass.

thisisnotmyname

What you encountered is very common for residential.  There are lots of people providing minimal drawing sets of junky designs for cheap fees.   The clients don't know better or don't care.  The designers usually work out of their houses and have no staff.


Dec 3, 19 6:16 pm
gibbost

RIck, while I see your point in trying to reverse engineer the fee, you're simply joining the race to the bottom.  Justifying a fee of what would be 1/3-1/4 of most architects is simply playing into their hands.  

To the OP, having this conversation early is the best you can hope for.  Either people see the value in an architect or they don't.  Most folks are looking for a simple means to an end.  It's why Walmart took off--they filled our need to buy worthless shit with no value.  Consumers will spend thousands of dollars worth of garbage and justify it over saving to buy one well-designed handbag/coat/pen/car.  The same is true in construction.  A permit set is a permit set.  The value is what's not easily seen on the paper--thought, care, creativity, honesty, and beauty.  You don't get those things for $2.75 a square! 

Dec 3, 19 6:41 pm
RickB-Astoria

I'm not really justifying the price of the unlicensed designer. It is simply a reality that some people are happy to live on

gibbost

But you see then, how licensed architects become dismayed at the process. If the general population--for better or worse--assumes that anyone with access to autocad can develop home plans for them, it automatically cheapens everything the architect has ever accomplished. It costs money to get a degree and license. An architect should be able to charge accordingly. In the OP, the potential client instantly equated 'some guy with cad' to a licensed architect--perhaps without even knowing how offensive that is.

RickB-Astoria

This "architect vs. unlicensed designer (building designer / home designer, etc.)" has been going on LONG before CAD. Before CAD, it was paper/pen and pencil. In a sense, this issue began before licensing. Even unlicensed people will often have some college education. Yes it costs money to get any degree. If lucky, you don't have loans after college. For me, 350 college credits of education costs money. Getting a degree isn't even absolutely required for getting licensed in California. 

The license costs money but not that much. Not all that different than what it costs for a building designer certification. Once you get through the exam costs, its the initial certification fee and the cost to maintain that certification. With NCARB, you might have the cost associated with the NCARB record fees but in a life time, you make up for the cost of getting licensed really quick considering you have the option to design any kind of building of any size. 

Once licensed or once certified as a certified professional building designer (CPBD), the cost is close to the same. Overall, even if you charge at the price of the unlicensed designer in the original post, you would be able to maintain the license with a renewal that costs only $300 (in California) every two years. Multiple states adds up. The cost of business licenses would be about the same between an architect and an unlicensed designer (assuming both follows the laws of business licensing). 

CPBD certification is nation wide at an annual renewal cost of $165. Comparable. If the U.S. had approached architectural licensing on a national level like some countries, the renewal wouldn't be too bad. 

Most unlicensed designers are only practicing in one or two states or something like that even though they could practice across most of the states. Real world practice in custom home design is in the local/regional context for practical practice range. Some do the stock plans thing and have a national scope due to publications.


RickB-Astoria

I do agree with you in that it can be quite offensive for a prospective client to instantly equate 'some guy with cad' to a licensed architect. While I may not charge as much as some architects, I do try to price services in the ball park and competitively. Getting off my dead ass and completing the CPBD certification could help justify the pricing more but still the shit heads at the bottom, I won't even try compete there.

$2.75 SF? That’s outrageous.

There’s a guy on Craigslist advertising $0.07 SF.

Dec 3, 19 9:02 pm
amplaylife

I love this dialogue and am glad I posted. All the insight and dialogue is beneficial and enlightening.  For instance, who knew there was even such a thing as "certified professional building designer"...is this some way around taking the multiple exams required to be a licensed Architect? Appreciate all the commentary Rick.

Also, as the supply of contractors are low and the demand is high at the moment - contractors are accustomed to bump up their prices because they are in high demand.  Wouldn't it benefit us as Architects to also follow suit;  lifting each other up rather than "joining the race to the bottom" as gibbost mentioned?

I mean, why in the heck did I go through all the education, hours in the field, mentorship and testing to compete with a draftsman with CAD plus experience? But I think the Walmart analogy works well to explain this.

Dec 3, 19 10:39 pm
RickB-Astoria

CPBD is a certification that competent experienced building designers may choose to take as a sort of peer assessment much as there is the "certified interior designer" in states where isn't any licensure for. California used to have a registered building designer program but was discontinued in the 1980s. It isn't a way around the exam as an architect. CPBDs are still unlicensed designers but usually with knowledge, skills, and experience. The worse problem is with those who buy themselves a $20 home design program from say... Broderbund and think they are professionals. Licensure isn't what really makes a person a profession. Knowledge, skill, and experience. There are people with licenses that are really professionals. Sad but true. 

Would it benefit us to not be joining the "race to the bottom"? Yes. Price collusion is something we have to be careful to not engage in activity that would be defined as "conspiracy to price fix". When you go through the process to get licensed, you are getting licensed so that you are authorized to engage in the full practice of architecture not just some limited form of it that is allowed via very narrow exemptions. (In most states, the exemptions are quite narrow). 

While I am a building designer (not yet licensed but would only be licensed in states where I would be licensed), I aspire to price myself reasonably for myself professionally and within the field to make for a sustainable business for providing quality design services which can't be rushed. Quality and fast really doesn't exist but sometimes doing things right can save time and money. At the same time, I also aim to make the services affordable. There can be a sort of conflict of interest in the juxtaposition between the interest of sound pricing and pricing affordability.  

Pricing is subject to supply and demand. I know things got better somewhat business wise where I am (Astoria, Oregon) because of local supply of architects and designers had dropped somewhat and the demand increased. An architect and a building designer passed away a few years ago and some years earlier, another architect moved to Portland which reduced his presence in the local market where I am. This has helped.

RickB-Astoria

I have been somewhat picky about not going after prospective clients who wants services at a price that is unrealistic.

Wood Guy

I don't price by the square foot but for a house that size $5K to $6K is about what it takes me for pre-design, schematic design and maybe getting a little into design development. Going through the full process takes me 3-4 times that fee for basic drawings, but I include energy modeling, electrical, mechanical and structural plans in my basic package. Go up from there for fully custom everything, interior design, landscape design etc..   

Dec 4, 19 12:29 pm
RickB-Astoria

In whole, I agree with you in a quality design service. However, quality design service, in and of itself, isn't required by law. There are code standards for HSW. Code requirements do not necessarily cause the amount of time a person spends to deliver services to increase. That depends on what becomes the standard for submittal documents and also in who is preparing what. As you said, you are doing energy modeling, mechanical, and electrical, structural plans, and so forth. 

Bare bones building design service maybe as little as just the "architectural" (floor plans, elevations, sections, etc.) with limited structural designing while some maybe done by an Str.Engr. but MEP maybe done not by the building designer but be MEP Engrs. or in some cases, the contractors in mech., electrical, and plumbing... depending on their experience. Energy modeling maybe done by an energy modeling/analysis consultant. What is the package of the deliverables? What is included in the fee? What part are you performing? What part is your consultants? Are some of the consultants covered by your fee or are they extra services your client has to pay for?

This is very difficult for the untrained client to compare the fee package because they don't really understand what is included in the services offered and part of the "price".


Menona

$0.07 SF -- THAT's outrageous...!


I find most people will offer to let you do things for free, you don't even have to charge them.  It's a great deal because it let's you get "experience" and is a great way to get good projects to have in your portfolio to help get other clients.  


Dec 4, 19 12:48 pm
RickB-Astoria

Why not just design something without a client and establish a project program for which you will try to design a solution in? Why not a design competition?

proto

the first day of my first year in grad school, we had an imposter try to join studio. all sorts of people thought he was part of the class, but it came out that he was making all sorts of preposterous claims (designed olympic bldgs etc) in various conversations with people. admin found him and tossed him out...good times

Dec 4, 19 3:30 pm
archi_dude

Just reverse engineer what you would provide at that cost. For example, exclude selection of finishes, provide a generic detail vs project specific and put city submittal and corrections as hourly, make him provide the SD set and charge hourly for code corrections. Spell it all out. Usually these players are doing the same and the client is just seeing the total and comparing apples to oranges. Someone like a concrete sub should be able to understand exclusions and compare what he's getting. Just sell it as yeah I can do it for that much! This is what you are losing let me know if you'd find value in any of these adds.



Dec 4, 19 11:57 pm
RickB-Astoria

Kind of like how I was doing above but more thorough and more accurate for the real thing vs. for the point of discussion. I had to make some assumptions about what the unlicensed person was providing but thank you for the rather eloquent way you put it.

There is definitely a trade off of quality and thoroughness of services rendered and scope of the design service for that price. What is that person providing and what are you providing.


amplaylife

This is all a good reminder of the importance of educating those seeking services about what it is you do and the value add you bring to the table as an Architect. The average person has a romanticized view of what we do unless they’ve had experience in building and construction. Hell, I wonder how many of us knew what we really were getting ourselves into. To me personally, everyday in the profession is an eye opening experience faced with new challenges.


Makes me of a time when a mentor of mine once questioned what the AIA does for us professionals in educating the public of our profession and value add. The time I’ve spent in it has been insular and a bit self serving in some respects.

Dec 5, 19 6:04 pm

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