i think you should charge your client for schematic design and partial design development. figure how much you'll be working based on hours in 2.5 months before you leave and multiple that with your inexperienced but perhaps pleasing work fees. or ask a lump sum for your design idea and some drawings.
too bad you are not doing the most interesting and beneficial parts for your development as a designer.

Orphan raised some good points there

I would go the way of Lump sum, granted you are bound to exceed that especially since you'll want to invest alot of time getting it just right...the butterflies of one's first project. You could use the RAIA price guidelines - I remember they had ones similar to the RIBAs when I was there last in 2001. At least it would give you a clue of how much to charge at what stages you'll be involved in. But to make it nicer to the clients, based on your personal relationship you could give them a sizeable discount of that amount.

Share the results when you are done - sounds like a nice project to start with...good luck.

This is great!

I am in the exact same situation-inexperienced (3 years from Bachelors) and doing a conceptual design package for a house for a friend. I am drafting a proposal as we speak.

So far I have done 8 billed hours of work for $25/hr on a handshake, just to get my foot in the door. That way it wasn't free, and it wouldn't scare them away at first. After our first design meeting, he liked what I was doing and has proposed going further along. We have set up a site visit in the next week.

The way we have negotiated our agreement, we set a lump sum-$2500 to get through conceptual design including a rendering, and I have agreed to do "optional services on an hourly rate basis not-to-exceed the lump sum". I think this gives both parties some flexibility. For my hourly rates, I have differentiated my services e.g. $25/hr for site analysis, preliminary skethces, CAD, etc to $50 /hr for more specialized skills such as 3D rendering. The fees will go up if we go into the documentation phase (SD, DD, CDs beyond) at which time I will partner with a licensed architect friend of mine and set up a "real" fee proposal.

From my observation, I have seen some big name architects do this stuff for free to moonlight a first time client, but they also have the infrastructure in place to do documents later, so they know that they will make $$$ on the back end. For people like us it is up in the air.

Here is an example of hourly rates at my previous corporate architecture office as part of proposal for a $20,000 feasibility study (This is a farily large development).

Design principal - $500
Project Director - $250
Project Manager - $200
Junior Designer - $100

this of course is on the high end as the Design principal is sort of a star architect.

So now, although my relationship with the client is casual and cordial, I think it is in the best interest of everyone to document our agreement. If not a official proposal, then at least send the client periodic invoices itemizing the services and reimbursables. If the agreement is in writing in front of you, then there is less possibility of the relationship turning sour due to miscommunication.

My approach so far has been to pick the brain of every architect I know, and ask them the propoer way to go about billing a client. So far I have been taken a back by how much more they charge compared to what I am charging. But then again, they were doing actual documents and had more liability. One key tip I have heard is not to include the term "architectural services" in the contract if you do not have a license. It might be against AIA protocol, but in New Zealand it may be different.

my ears are open.

grim, congratulations by the way.

Here is a proposal that I have written up. I kept the basic scope of service low, and provided a lot of optional services, should the client want them. If the client doesn't want them, I can see myself doing it anyway as part of the design process.

Based off of advice, since I am not a registered architect, I left out any verbage related to professional service or architectural service, and included the option of doing the construction documents under the supervision of a licensed architect (my friend).

please feel free to comment.



RE: Untitled House Project

Conceptual Design and Digital Rendering Proposal



Dear XXXX,


I am pleased to submit this proposal for preparing Conceptual Design Drawings + Digital Renderings for Untitled House Project located at XXXX in accordance with our conversations on May 3 and May 11, 2006.



1. Project Description - 3,000+ sf single family home on approximatey .27 acres
2. Scope of Services - deliverables for this scope of services shall include:
1. Site Analysis
* Document and photograph site with emphasis on simulating framed views
* Attend meetings to review analysis
2. Preliminary Building Plan/Conceptual Development Options
* Prepare diagrammatic building plans
* Prepare drawings illustrating building massing
* Attend meetings to review options
3. Computer Rendering
* Prepare one (1) rendered image for one scheme to include lighting, materials, landscaping, and site with change orders (not to exceed 2) included in lump sum fee.
3. Fees
1. Fees for services described in the aforementioned scope of services shall not exceed $2,500 based off of approximately 70 billable hours
2. Reimbursable expenses are in addition to this and will be billed accordingly
3. The fee will be invoiced biweekly and due 15 days upon receipt of invoice
4. Optional Services - At your request, I can provide the following services on an hourly rate basis with a pre-determined not-to-exceed lump sum fee.
1. Additional rendered images of the scheme determined in the scope of services will be provided at a discount
2. Scale models of the entire project or portions of the project to understand the scope of the work prescribed in that area
3. Portions of the design can be developed further to better understand the proposed design concept
4. Additional meetings beyond those listed in the scope of services will be billed on an hourly basis as additional services
5. Exploration and research of specific sustainable design measures including but not limited to prevailing wind studies, active solar measures, material life cycle cost and payback timeframes for sustainable systems
6. Professional Services and construction documentation can be provided under the supervision of a registered architect. Reccomendations will be provided upon request.
5. Hourly Rates for Additional Services
1. Design services - case studies, research, site analysis, sketches, diagrams, massing studies - $25
2. Presentation Drawings - photoshop, illustrator, layout software - $35
3. Advanced Rendering/Computer Modeling and Simulation services - $50
4. Design and Construction Documents - TBD
6. Reimbursable Expenses - Project related expenses including, but not limited to ground transportation, parking, lodging, and printing reproduction shall be reimbursable at direct cost.
7. Confidentiality - All knowledge acquired during the course of its engagement of the work which may not be accessible or known by the general public shall not be used, published or divulged to any other firm, or in any advertising promotion without first having express written permission of the owner.
8. Ownership of Documents - Title to all plans, drawings, specifications, ideas, concepts, designs, sketches, models, reports or other tangible work produced shall remain the sole exclusive property of the owner. I may retain copies of the work provided it is not used without the owner's prior written consent
9. Time Frame - The services described above shall be provided within 90 days from the approved date of this agreement unless otherwise extended by XXXX and XXXX. I may be able to reduce the time frame if required to meet your schedule.



This summarizes my proposal based on my knowledge of your requirements. Please notify me of any clarifications or to discuss any of the points.


I look forward to hearing from you.

In New Zealand an architect probably wouldn't charge more than $150(NZD) an hour, and im talking about a principal/director here generally hourly rates range from $80 for a grad up to about $150 for a director

Dot, thanks for posting your contract draft. Congrats to you as well on your commission! I plan to take the contract a bit more seriously now, no writing it on a napkin or anything.

Orhan, I agree that it’s too bad we’re not doing CDs, though I’m hoping that condition might change. Need to make some contacts with architects here first, and see how difficult/expensive it will be to fly back out after we return to the States.

The lump sum seems to be the way to go. This is basically how I plan to break it down for the client; feel free to pick apart any of it (or to tell me I’m crazy for charging so much or so little)

Budget=300,000NZD

Gross fee = 10% of $300,000 = $30,000

15% SD
15% DD
40% CD
30% CA
(this is from a NZ consumer website—I thought the DD was a little bit low, and CA a little high)

SD + DD = 30% of $30,000 = $9,000

9k’s in our pocket sounds like Christmas morning to me, but even when I think about what my wife and I would earn working in an office for 10 weeks, it doesn’t seem like that much money. Nevertheless, I know the client’s jaw will drop if I popped that number on him. So how to break that down without making it look arbitrary (and therefore more likely to shrink further)?

I can offer a 20% discount because we are inexperienced, and the process will be a bit of trial and error. (I’ll be careful not to mention the word “error”). It will be a trial… Anyway, that’s
$9,000-$1800=$7,200
Then I can say that we don’t have an office to run, nor should we take overhead. Off with another 15%.
$7,200-$1,100=$6,100

That seems more like a number that they can swallow, but when you figure 10wks X 40hrs X 2 people is 800 hrs, that gives us an hourly rate of $7.50, which means beans and rice for dinner every night. Hey, we wouldn’t have started all this if we liked to pad our pillows with dollar bills.

What do people think of the fee scale and breakdowns? Also, should I ask for a retainer or is it best to bill them after we’ve shown tangible results?

grim - yesterday i was going to post something similar to your last one. and just from what we usually do i came up with similar percentages for sd,dd,cd,ca.

but i didn't post anything in the end because i wasn't sure of the arrangement with the engineers and didn't want to give a bad lead. your 10% of the construction cost is usually what the whole design TEAM gets - including structural engineers and mech/elec/plbg if you have them.

if they're under separate agreement, you may not find the client willing to give you 10%. if they're under your agreement, you need to back their fees out of the total at the very beginning.

most impt - just make sure you know what everyone is expecting right at the front end.

$6100 definately seems a resonable fee for sketch design and developed design of a small residential project. Also take into account whether a Resource Consent will be required.

Hourly rates up to a maximum fee is a good method for settling the fee in the early stages. There is an nzia guide to architect's charges which you can find at http://www.architecturenz.net/working_story2.aspx
I would suggest invoicing after each stage or monthly depending on how long you imagine the process to take. Asking for a retainer is probably not a good idea but that really depends on your relationship to the client.

although I am slightly confused just about the figure of 800 hours that you mentioned? that seems like an excessive amount of time to produce preliminary drawings? or if it is that you will be going into a lot of detail then some of that work could probably be charged as building consent and therefore increase your fee

Grim, I think you're on the right track, but 10% is a bit low for gross overall percentage. I would start in the 12-15% range and then work your logic backwards from there.

Also, dot, I'm not sure why you're charging only $25/hour for this work. What was the justification for that? That is really, really, really absurdly low.

This is a really loose way of figuring things, but might help. Most people know how much they would be worth on salary to a local firm. Say you know you'd make $25/hour to a local firm ($50,000 salary). Well, that firm must charge 3x your hourly pay in order to cover their overhead. Therefore, if you don't have the overhead of an office and want to cut your clients a deal, why not charge 2x? Then you're at $50/hour and you still get to cover your associated expenditures (there WILL be some, even if you don't have an actual office!).

Also, congrats to both of you! What a great feeling!

myriam,

thanks for the input. I was afraid someone would say I am too low. I am actually at $40/hr for real work, considering my level of efficiency I can get the work done in 60 hrs vs the 70 hrs i will bill. please keep in mind that this proposal is only for the conceptual design phase. $25 an hour to do sketches is a pretty good deal to me. once, we get into SD the fee will be more comparable to the fees of an architecture office. plus at this phase, I have zero expenditure and zero overhead. anything i do spend is reimbursable.

the numbers were based similar to grim. given a 250k budget, design fee of 10% is 25k. 10% of that allocated to conceptual design is 2.5k which is the lump sum that set.

I understand that this is still really really low, however, I see the opportunity and relationship that I set with this client is worth more than the dfference of $25 to $50 an hour.

naive?

well, just met with the client today! We sat down for lunch at their dining room table, and he said "OK how much will it be?" and I had about one second to say "Well--" before he cut me off and said "That's too much!" Gotta love it. We beat around the topic for about half an hour, just talking a bit of design, a bit of what I hoped was some flowery prose about the dedication we will have to the project, then eventually we got to the number.

I decided last night that we would only be contracted for SD, which I amended to be 20% of the design effort. So that amounted to be $6k, and then I explained why we weren't going to charge the full amount, and popped out my proposal of something between 3 and 4k. It just went so smoothly. They agreed to $3500, and I still can't believe that we're going to get paid to do this!! We walked out to the site which is on property adjacent to their house (that they sold already), shook hands and everything. Friday I will procure the contract, and we'll get started on site analysis right away.

So far these comments have been really helpful. Steven you raise a good point. I will need to clarify in the contract that the 10% figure I've started with is exclusive of the engineer fees. I think it's a good idea to keep it separate as we're not 100% sure that we will carry through past SD. And I don't think they will complain about the fee seeing as I've already heavily discounted it. My hope is that I can bring a mentor aboard as dot is doing, and not discount my 10% for the remaining phases of design. I figure the engineer shouldn't be more than 2-3%, which gets me up to the range where myriam is suggesting that I start at, if I were to include the engineer.

regarding the 800 hours of work, I think that's probably overboard for a house, but this will be like a studio project for us, except that we're getting paid and the thing will (hopefully) get built. I think we're also preparing ourselves for exploring lots of options, building extra models, etc. mouth is watering...

good deal grimhart. sounds like it's official. some good advice i got was to knock'em dead at the first design meeting.

similar story, when i first met with my client, and agreed to do some studies for $25/hr. we chatted for 30 minutes then said "okay, let me right this down, so we agreed to $24/hr". then he looked up with a grin. I thought that broke the tension pretty well. Then he asked if I needed a retainer. I said very casually, "nah, i'm good".

dot, regarding:

8. Ownership of Documents - Title to all plans, drawings, specifications, ideas, concepts, designs, sketches, models, reports or other tangible work produced shall remain the sole exclusive property of the owner. I may retain copies of the work provided it is not used without the owner's prior written consent

almost all designers/architects retain ownership of the documents. if the owner wishes to use the documents in the future, the owner needs to get written consent from the designer/architect.

also, using 'I' in a contract can be confusing, it's best to establish who the owner is and who the designer is, then use those terms throughout.