I am trying to learn about the business side of architecture and have question regarding fees.
For example, lets say the design is for a custom residential home and the design fees are 15% of the accepted construction bid. Are structural engineering fees, mechanical, electric, etc. generally included within that 15% or are they billed separately? If so, are these billed by those designers to the client, or are they billed to the architect and in turn passed on to the client?
Depends on your contract with the client. If you select and hire the consultants, then it is included in your fee. If client contracts separately with the engineers, then obviously they pay the engineers directly. A 15% fee is pretty heavy in my experience, so I would imagine it would include consultants, meaning the architect is hiring them as subcontractors.
Would you consider 15% fee heavy for a very modern design that required lots of designing, extensive detailing, and structural work, or were you meaning in regards to a more traditional design?
I was really thinking of a more traditional house that would most likely be built by a custom home builder as a spec, or by an owner client who was working with a pre-selected builder. If this project is something very exotic, 15% might not be excessive. Generally, my experience is that most clients (definitely most builder-clients) will NOT be willing to set the fee as a percentage of cost since they think it is just an incentive for the architect to piss away money. Generally, most of them want either a fixed fee or a fee based on finished square footage. In the case of an area based fee, probably $5.00 per sq. foot is not a bad ball park number (not to include engineering), although I've seen guys do it for $2.00 to $3.00. God knows how they make any money, but if you're doing a basic skimpy set by yourself in your spare bedroom, the overhead is pretty low. Ultimately, it's supply and demand like everything else.
i've never worked from a percent of construction cost. it's not fair to the client, and it's pretty risky as far as getting paid for services rendered. once drawings are issued, most of the work is done--this is not the best time to find out how much you'll be paid.
i only offer lump sum agreements, with careful control of scope of services. every job is different, but at the end of the day, if i'm providing all the services, most projects come in at 4 - 5% of construction cost. (for the record, i lose projects at this rate, because people still think it's expensive). if i have MEP, structural consultants, then we're more into conventional percentages of 8-12% depending on the complexity of the project.
i actually check my lump sum fees against a projected construction budget, just as a reality check, before issuing my proposals.
Mar 26, 13 4:15 pm ·
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Design Fees
Hi,
I am trying to learn about the business side of architecture and have question regarding fees.
For example, lets say the design is for a custom residential home and the design fees are 15% of the accepted construction bid. Are structural engineering fees, mechanical, electric, etc. generally included within that 15% or are they billed separately? If so, are these billed by those designers to the client, or are they billed to the architect and in turn passed on to the client?
What is included within that 15% typically?
Thanks!
Depends on your contract with the client. If you select and hire the consultants, then it is included in your fee. If client contracts separately with the engineers, then obviously they pay the engineers directly. A 15% fee is pretty heavy in my experience, so I would imagine it would include consultants, meaning the architect is hiring them as subcontractors.
Thanks for the reply
Would you consider 15% fee heavy for a very modern design that required lots of designing, extensive detailing, and structural work, or were you meaning in regards to a more traditional design?
I would recommend reading through this blog. It will probably answer all of your questions.
I was really thinking of a more traditional house that would most likely be built by a custom home builder as a spec, or by an owner client who was working with a pre-selected builder. If this project is something very exotic, 15% might not be excessive. Generally, my experience is that most clients (definitely most builder-clients) will NOT be willing to set the fee as a percentage of cost since they think it is just an incentive for the architect to piss away money. Generally, most of them want either a fixed fee or a fee based on finished square footage. In the case of an area based fee, probably $5.00 per sq. foot is not a bad ball park number (not to include engineering), although I've seen guys do it for $2.00 to $3.00. God knows how they make any money, but if you're doing a basic skimpy set by yourself in your spare bedroom, the overhead is pretty low. Ultimately, it's supply and demand like everything else.
i've never worked from a percent of construction cost. it's not fair to the client, and it's pretty risky as far as getting paid for services rendered. once drawings are issued, most of the work is done--this is not the best time to find out how much you'll be paid.
i only offer lump sum agreements, with careful control of scope of services. every job is different, but at the end of the day, if i'm providing all the services, most projects come in at 4 - 5% of construction cost. (for the record, i lose projects at this rate, because people still think it's expensive). if i have MEP, structural consultants, then we're more into conventional percentages of 8-12% depending on the complexity of the project.
i actually check my lump sum fees against a projected construction budget, just as a reality check, before issuing my proposals.
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