“How much does an architect cost?” This is inevitably one of the first questions that people who have not worked before with an architect will ask. But anyone who asks this question is looking at their situation entirely the wrong way round. A better question you should be asking is “How much can an architect save me?” to which the answer is: an enormous amount!
Firstly, a good architect will help lead you through a complicated and difficult process.
Savings: your sanity.
Secondly, a good architect will help you get the same benefit out of a smaller area by designing it for space efficiency.
Savings: 10% on construction, 10% on taxes, and 10% on upkeep and operations.
Thirdly, a good architect will make your building more energy efficient and reduce the maintenance on your structure.
Savings: 10-20% or more on annual operational costs.
Fourthly, a good architect will produce a set of documents (CDs) suitable for competitive bidding.
Savings: 10-25% of the construction cost you would have gotten without the CDs after all the change orders to incorporate elements you failed to tell the contractor about.
Fifthly, a good architect will design a building that is timeless and stylish and will most likely sell for 10-20% more than similarly located non-architect designed buildings. So, every dollar you “save” by not hiring a good architect may cost you $10-20 over the life of your ownership of the building.
Now, at this point, many people say that is all well and good, and they are convinced that they will get much more value from an architect than what they would pay them. But they still need to know (for planning purposes) how much an architect will charge for those valuable services, so they can set the money aside as part of the project.
The answer is that each firm is slightly different, and each project that a firm prices is slightly different as well. There are many pricing scenarios that are used and each has advantages and disadvantages, for both the owner and the designer:
“Time and Materials”: This is perhaps the most straight forward and easy to understand. Each hour that the designer spends on your project is billed to you, and you derive the benefit of that time and effort in the quality of the design of your future building or renovation. Other resources like printing, shipping, and travel are billed to the client, often with a slight markup of 10 -15%. The advantage from the client’s side is that they are only paying for what they get, and there is no incentive for the designer to spend more on their construction from a perspective of profitability. The disadvantage is that there is no clear limitation on the expense, which makes many people feel uncomfortable in such a high stake, high-cost realm as building design and construction. From the architect or designer’s perspective, the advantage is that they will be compensated for the work and expertise they provide; the disadvantage is that there is quite a lot of recordkeeping necessary to properly allocate each employee’s time to each of the many projects they may be working on. At the current time, in New England, principal architects are generally billed between $120-250/hour; senior architects and designers are billed at $90-120/hour; junior architects and designers are billed at $60-90/hour; administrative staff are billed at $50-70/hour. Using billing rates alone to evaluate and select an experience will allow them to undertake a specific task, but it doesn’t establish a sense of how a given marketplace and moment have valued their services.
“Percentage of Construction Cost”: Many architects price their services as a percentage of the total “notional” construction cost of a project. This makes the recordkeeping considerably easier for them and gives the building clients a relatively clear sense of what the cost of the challenge of the project really is. A multimillion-dollar warehouse might be designed for as little as 6-7% of the construction cost, whereas the design of a small renovation of an existing building, with lots of challenges and unexpected discoveries, might range in cost anywhere from 12-20%. On average, many online references give 10% of construction as a fairly average design fee for many projects, but this is, of course, highly dependent on countless factors and is only the roughest of guidelines. In general, the larger the project, the smaller the percentage cost will be, and the more complicated and unique the project, the higher the percentage cost will be. The disadvantage to this approach from the owner’s perspective is that, as the cost of construction rises, the greater the design fee will be, and the greater the fear that the architect is choosing products and designs that are more expensive than other alternatives that may exist. The disadvantage from the architect’s perspective is that, as the owner changes their mind, the cost of design alternatives is not being properly captured in the fee. If the project is designed three times under three different scenarios, they might be entitled to use three times the ultimate cost as the basis for fee calculation, which would certainly not make the clients very happy. We, as a firm, shy away from this approach because we want to make it clear that the work we do is fully beneficial to the client, and that we are always in direct alignment with their interest in quality and value in the creation of a project.
“Cost per Square Foot”: This is, in a way, a combination of the previous two approaches. An architect might charge anywhere between $10-25 per square foot. Famous interior designers might offer their services at double this square foot cost. Depending upon the cost of the construction, this could represent anywhere from 8-15% of the construction cost. There would be a clear understanding of what services were included in this number and which were not. As the scale of the project grows from additional client demand and request for space, the ultimate fee for the project tends to grow as well. However, if the project size were to be suddenly cut by 50%, the fee would not drop by 50%, because the work for the larger scale project would already have been delivered to the client and that work cannot be magically undone. One challenge with this approach is to determine what percentage of the fee should be paid at any given moment, since it is not directly connected to the delivery of hourly services, and typically the “percentage of completion” estimate is applied to the total fee, which is ultimately due based on the architect or designer’s estimate of where the design work stands and is relative to the ultimate delivery of the final product.
“Lump Sum”: Some skittish clients want a single fee that will encapsulate all the costs that they will accrue during the entire design process. This is akin to asking a forester to cut down an entire forest to give a precise cost without knowing exactly what challenges and obstacles to the task lie ahead. Most designers, if forced into this method, will estimate on the high side to help protect themselves and write in clauses to the contract that will change the fee if there are any changes to the design – which there inevitably are. This gives the owner the advantage of a fixed number at the start of the project, but the number will tend to be on the high side and may only be fixed until they make their first change in the overall scope of the project. At that moment, they are back to the negotiation phase of the process but now have a building underway with their house or business possibly half-demolished. This is when the advantage of a “lump sum” may feel relatively transitory to the owner as they try to figure out how to proceed without “breaking the bank” but still get the design they want and need.
As we outlined in the article on selecting an architect or designer, it is important that each side feels a sense of trust in the other party. This is not the simple exchange of X dollars for Y pounds of sand, but rather a partnership of ideas, expertise, and effort to create an ideal design that will be functional, beautiful, and efficient for many decades to come. Each party should feel that the other is looking out for their interest and is not trying to get “something for nothing.” I will say that when we select the clients that we choose to work for, we are looking to establish a long-term relationship so that we are doing multiple projects for them over time and getting the recommendation to work for their friends and acquaintances. We don’t want to do projects where we are simply getting paid to do a one-time transaction with them and to never be seen or heard from again afterward.
This is one firm’s perspective, but there are many online resources you can use to confirm your understanding of how the pricing of architectural and design services works including these, which we hope are useful to you:
Even after all of this, there are those who will say, “A penny in the architect’s pocket is a penny out of my pocket, and I want to keep as many pennies in my pocket as possible.” To me, that is a short-sighted way to try and save money. It is similar to trying to save on the wedding cake for your big day by mixing the ingredients together without the benefit of a recipe. The real cost is not in the recipe, but in the ingredients, which can be made either into the most fabulous cake you will ever eat, or into an inedible mess that you will never forget. Building is just like that, so invest wisely in a good architect and a good design. By doing so, you will reap the benefits of your decision for as long as you own the building and be granted an enormous financial bonus when you finally choose to sell it. Good luck with your project and choose wisely and well!
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Ross Cann has been a licensed architect since 1993. He holds honors degrees in Architecture and History from Yale, Cambridge, and Columbia Universities and is a LEED Accredited Professional and is Founding Principal of A4 Architecture & Planning headquartered in Newport, Rhode Island.