Clients are often wondering how much to expect to pay architects for their work. Prices for the services of architects vary greatly between locations, project types, and experience level.
There are regulations that obscure this even more, so very often both the client and the architect have no idea how much the former will spend and the latter earn. In order to avoid creating a stressful experience, have a clear understanding of you architectural fee structure.
Let’s take a look at some of the typical architectural fees, structures and guidelines.
The most common ways to put together architectural fees are: 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 whole construction cost. That means, using an architect to design a $150.000 home should normally cost from $12.000 to $22.500.
This approach to architectural fees is the most common one, 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 larger percentage for remodelling projects and less for brand new construction jobs. Remodelling is very likely to take more revisions and unexpected construction problems will complicate things even further.
One of the top architectural project delivery methods, D-B-B is when the architect produces the bid documents that contractors bid on. The architect gets a percentage of the whole project cost, not just the construction stage.
Some architects charge fixed fees – but that requires the project to be clearly defined. Usually fixed fees are appropriate with large project owners that complete a lot of 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.
A lot of architects, and especially architectural agencies, are basing their fees on an hourly rate.
Architect’s hourly rates normally range from $250 (the hourly rate of a principal overseeing the entire project, or an experienced architect) to $70 (typical hourly rate of an architectural intern with several years of experience.
If you are an independent architect and you are considering operating on an hourly rate basis, take a look at our article on setting your hourly rate.
The most common and obvious application of the hourly rate system – smaller projects and initial drawings.
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.
All of these types of work require different amounts of effort and hours, so they need to be priced differently.
Architects that get a lot of business and want to hedge their risks may develop some sort of a mixed fee structure. They can charge a single-digit percentage of the project cost, as well as 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.
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 expenses, even the indirect ones: sick leaves, project management software and subscriptions, marketing, support, and so on. Account for inflation, recessions, lockdowns, and other risks that are 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 and provide a unique value, and are worth a lot. Value-based pricing is a dream for many, but it’s a totally realistic dream – what matters is you pick a high rate and work closer towards it.
Architectural fees best practices (for architects)
There are things you need to pay very close attention to in order to have a better experience working and getting paid.
Keep in mind that for the client, you, the architect, are the expert. You have the power to say how things should be done, what they should cost, and who you should trust. Act and price yourself accordingly.
The titbits below will help you have a consistently smooth experience charging your clients – which in turn helps you grow rates.
– Be transparent
Nothing breaks trust between an architect and a client than changes to the fee schedule, rates, or prices. 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 documented. This is not just good for your current project, but gives you data for further projects estimates.
– Invoice properly
Make sure the invoices are detailed, congruent with your contract, timely, and look good. Read the invoicing mistakes post and take action – you want your clients to feel comfortable paying you.