Architecture Project Schedule, Fees and Pricing Your Work Right
Clients often wonder how much to expect to pay architects for their work. Unfortunately, prices for the services of architects vary significantly between locations, project types, and experience levels.
Some regulations obscure this even more, so the client and the architect often have no idea how much the former will spend and the latter will earn. To avoid creating a stressful experience, clearly understand your architectural fee structure.
Let’s look at some of the typical architecture project schedules, fees, structures, and guidelines.
The most common ways to put together architectural fees are a percentage of the project cost, hourly rate, and square foot rate.
Percentage of the construction cost
For most projects of “regular” complexity, an architect will charge from 8% to 15% of the entire construction cost. So, for example, using an architect to design a $150.000 home should typically cost from $12.000 to $22.500.
This approach to architectural fees is the most common; it’s logical and justified. The larger, more complex, and more expensive the construction project, the more work the architect has to do.
Likewise, most architects will charge a more significant percentage for remodelling projects and less for brand new construction jobs. Remodelling will likely require more revisions, and unexpected construction problems will complicate things further.
Design-bid-build
One of the top architectural project delivery methods, D-B-B, is when the architect produces the documents that contractors bid on. The architect gets a percentage of the project cost, not just the construction stage.
Fixed fee
Some architects charge fixed fees – but that requires the project to be clearly defined. Usually, fixed costs are appropriate for large project owners who complete many construction projects per year.
The downside of the fixed fee approach is obvious – whenever the construction project unexpectedly grows in scope, the architect’s compensation remains the same.
Hourly rate
Many architects, especially architectural agencies, are basing their fees on an hourly rate.
Architect’s hourly rates typically range from $250 (the hourly rate of a principal overseeing the entire project or an experienced architect) to $70 (the typical hourly rate of an architectural intern with several years of experience.
If you are an independent architect considering operating on an hourly rate basis, take a look at our article on setting your hourly rate.
Smaller projects and initial drawings are the most common and obvious applications of the hourly rate system.
By square foot
This architectural fee structure is not as common, with architectural fees per square foot ranging from $2 to $15. There are different types of work here as well –
- Concept development and drafts
- Construction documents
- Project management and administration.
These types of work require different amounts of effort and hours, so they need to be priced differently.
Combined fees
Architects that get a lot of business and want to hedge their risks may develop a hybrid fee structure. For example, they can charge a single-digit percentage of the project cost, a relatively small fee for the square foot, and an hourly fee over a certain threshold of hours worked.
As a result, they have enough hedging against sudden project growth and can bill for unexpected additions easily. Advanced project planning tools for architects will let you set up a complex and balanced architectural fee schedule.
Architectural pricing methods
There are two main ways to look at pricing your services as an architect.
Bottom-up
In a nutshell, this method means adding up your expenses and throwing your profit margin on top of them. You need to make sure you’re not leaving out any fees, even the indirect ones: sick leaves, project management software and subscriptions, marketing, support, and so on. Account for inflation, recessions, lockdowns, and other risks out there – if you can find a way to do so.
Top-down / value based
Value-based pricing originates from the notion that your services are unique, provide a remarkable value, and are worth a lot. Value-based pricing is a dream for many, but it’s a realistic dream – what matters is you pick a high rate and work closer towards it.
Architectural fees best practices (for architects)
You need to pay close attention to things to have a better experience working and getting paid.
Remember that you, the architect, are the expert for the client. You have the power to say how things should be done, what they should cost, and who you should trust. So act and price yourself accordingly.
The titbits below will help you have a consistently smooth experience charging your clients, enabling you to increase your rates.
– Be transparent
Nothing breaks trust between an architect and a client when changes to the fee schedule, rates, or prices occur. Therefore, be upfront about all possible expense increases or charge more in general and be transparent about why you charge more.
– Keep track of all expenses
Always document all expenses and mention that you have them written. This is not just good for your current project but gives you data for other project estimates.
– Invoice properly
Make sure the invoices are detailed, congruent with your contract, timely, and look good. Then, read the invoicing mistakes post and take action – you want your clients to feel comfortable paying you.