Well how much does an architect cost ?
I guess this is the 6 million dollar question at the moment considering the never-ending depression we’re currently battling against. In this age of anti-monopoly/price fixing and considering the range of architects that are currently available (from the Starchitects that have seen their practices either go under or had a huge drop in staff numbers to the hungry one-man practices (of which I proudly count myself); you might as well ask yourself how long is a piece of string.
What I can do however is outline the three key ways an architect normally works, this system is included in the Royal Institute of Architects of Ireland (RIAI) Standard Agreement between Client and Architect and the RIBA and AIA (and all the other professional architect bodies) will have something similar. I’ve taken the details below for domestic housing but other agreements and percentages are available for other building types.
Method 1: As a percentage of the Total construction cos
The RIAI can no longer provide architects with recommended fee scales but each year they do produce a graph showing statistics for the previous year of Projected Building Cost against the Percentage charged for different Building Types.
The graphs show scattered graphs with median lines for one-off housing projects, Renovations and House Extensions up to €5M. The percentages then spread from 4-16% dependent on the project/cost.
Therefore for a project costing (excluding VAT): €100,000 the total fee for RIAI Work Stages 1-4 (Initial Design, Developed Design, Detail Design and Construction to completion) for a fee percentage of 10% is €10,000.
I would highly recommend this method of working where the architect is retained for the entire project; his/her code of contact requires them to work to your budget and not to deliberately recommend the most expensive option ! This method of work also allows to include other services that wouldn’t be included in the services below such as wall and tiling designs and layouts, advice on sustainable and lifetime design.
Method 2: On a lump sum basis
This is where a fixed lump sum is agreed between client and architect for some or all of the above stages.
This method may be suitable for a part architectural service; for a few sketch designs, the planning application only for example but it should be emphasised that you may not be utilising your architect in the best way; architects will be more committed to the project when their skills are utilised throughout the ENTIRE course of the design, detailing and construction.
The benefit of working this way is that the client knows exactly how much the architectural fees are going to cost in advance of construction. The disadvantage is that the lump sum fee for an equivalent stage may be higher than the equivalent construction percentage basis.
Method 3: On a time charge basis
This is where the work is charged on a per hour basis; the RIAI agreement allows for a ‘principal’ and ‘technical staff’ rate. Using this method may be ideal for short, easily defined projects where the total architectural fee is reasonably low.
The advantage to the architect is that he/she is getting paid exactly for the amount of work undertaken; the disadvantage to the client is that the hours can quickly mount up and costs can quickly spiral out of control.
The hourly rate price may also be a higher rate than either the equivalent percentage fee basis or the lump sum fee.
Feel free to comment; would love to hear from other architects and related professionals on alternative pricing methods…
Hi Mark. This is a very interesting topic and an excellent post. I have struggled in my practise with how to structure fees. I have found that per hourly rate generally is a disaster with the client invariably feeling that they are being taken for a ride (in one case even when I told the client beforehand how many hours the job was likely to take and that was the amount of time I charged for!… A simple multiplication exercise was all that was required)
What I do nowadays is give a fixed price for core services and identify any items or quantities I can that are not covered by the core services- eg more than 10 site visits will cost X per visit.
I always ensure to warn the client if the extra costs look likely to kick in and try to give an estimate of what they will be. The client feels empowered because they know that they can say no. Generally there’s no issue and everyones happy. It’s like forming a mini contract added on to the main Agreement. The trick is to use my experience to identify extra costs while writing the draft Agreement. Once it’s written in you’re covered- obviously as long as you’re being up-front about everything.
I’d be interested to hear other comments on this topic.
Nice one Mark.
Sometimes working on a % the client has the perception that the designer is looking to make the building as expensive as possible, as its to the designer’s benefit, while with fixed price the specification doesn’t have a bearing on the designer’s fees.
I would tell potential clients that they most properly will get a cheaper quote, elsewhere, but they may not get the same service or level of detail.
We’re normally the fixed fee route, outlining what’s included and excluded, with an hourly rate quoted for works not detailed within our scope of works/fee agreement.
We’ve used %, fixed fee and hourly charge for various different jobs. Fixed fee is nice and simple on the face of it but it’s very easy to get burned if the scope of the job changes while you’re doing it as it invariably does and. Hourly rate is best suitable for small-ish chunks of work for repeat clients. % is probably the best way to go as it usually captures best the amount of time you end up having to spend on it but can be a problem for very small jobs which are hard to do profitably at a % rate which sounds reasonable.
Problem at the moment is that if you’re quoting % fees, you have to quote lower to get the work and because people have an expectation that they can get better deals in a recession, but you’re also looking at building costs having dropped by maybe 33% or more so your fee is getting reduced further while the overheads and staff salary costs haven’t gone down by as much
Excellent comments, if I’m doing it on a percentage of the construction cost my % has stayed the same; my argument for this is that my fee is going to be lower as tender prices are now lower due to recession. The last thing architects should be doing is getting into a price war.
Well, that’s true and it’s usually the case that if cost is the primary consideration, as john says above, there are always going to be cheaper options than employing an architect. Problem is that it’s much harder to get work these days and if you have a good sense that potential clients have a certain percentage in mind and you can still do the job profitably at that fee, there’s no point in losing the job chasing a fee they weren’t going to pay but it’s a delicate balancing act and the lower your fee the more risky it can be if there are time overrruns, delays and/or indecision from clients
What sort of range would any of you consider to be a reasonable hourly rate
We’re in a different world to that of even a year ago; some architects are working cheap, some are not – how long is a piece of string?
I employed an architect on a percentage basis. Towards the end of the job, he had written the snag list but not all things were done, he called me and said that if I considered he had done a good job would I think about paying him more money. I said no, as we had an agreement and I was driving down the M50 at the time of the call. He said perhaps I needed more time to consider. I said I didn’t but as a single woman I felt intimidated. I heard no more from him, he sent his final account and I heard no more. Which has left me with odd things still not done. I feel aggrieved at being unceremoniously dumped but unsure if I was somehow in the wrong.
Hi Jill
I’m sorry for your experience with that architect; we’re not all the same and I stick to any prices I give
Mark
Reblogged this on Mark Stephens Architects and commented:
This post from 2010 is still very popular and not much has changed but will need to update for SI9