Typical Design Fee

[Anonymous]

Just curious, what are your flat rates for designing residential work? I know it is a broad question but give a ex.

[Rick Thompson]

Just a suggestion, I stopped doing custom work (praise the lord)... but this worked fine for me. Charge buy the foot (which can vary with the job) which is to include "X" number of meeting hours, and no major restarts... those get billed by the hour. I haven't done it in a while, but $6/ft (engineering as required), and then starting charging hours after 15/20... (depending on how fun they were to be around:)

[Vitruvius]

Keep in mind that fees cover office & operating expenses and are not all accrued to salary and profit. In looking at the example of $75,000. you have to factor in the other - very real - costs.

Profit Target - 20% = $15,000.
Marketing Costs - 6% = $4,500. (you don't win every pitch do you?)
Salaries - 650 hours x $30 x 2.75 multiplier (office space / software / benefits & holidays) = $55,000.

If you do 1 day a week of contract administration for 6 months that leaves you about 12 weeks to do design & contract documents. Which is tight if you're talking about a $400K project and impossible for a larger project.

A sole proprietor working from home could probably manage to do the work for about 2/3's. But even then you have holidays, marketing time, and certain overheads. Plus risk which you need to get paid for!

Cheers, Cameron

[Anonymous]

Am i allowed to cry ??

Here in Greece things are quite tragic.
Fees are defined by law using a mathematic formula which is supposed to connect the cost of the estimated cost of building to the fee the engineers get.
Till here ok. BUT the estimated cost is totally factitious. With cut down prices form 20 years ago!.
The actuall fee is about 1% of the total cost [most times not even this] and most of the times you dont even get that too
And that 1% is for all engineers involved. [architects , civil engineers, electrical engineer....]

You may now understand why we say that prices of AC are hi!.

If i was getting 12% of the REAL cost i would not even think of the price for AC or similar software.

Can i move in the US? [on second thoughts.. i will move after hillary is in command ]

[Rakela Raul]

can the author of the subject summarize the topic now?? i believe there is plenty info to draw almost a conclusion about fees or porcentages.
thx x the topic cole_const.

[Anonymous]

I just stumbled onto this thread, I am late in posting - but the subject is interesting none the less.

Let me throw in this example, I have seen it as typical in southern California.

3,000 s.f. home, cost of construction is typically $150 s.f. so the home could cost $450,000. The contractor is normally be at about 20% profit after materials or $90,000 for his 5 months of part-time supervision. A good contractor can run 3 jobs at a time.

Now, the Architect/Designers charge various ways: Lets look at s.f.x $7 - which equals $21,000. Add engineering $1.50 s.f. mark-up and calc. ($4,500) and title-24 ($350). Plans done this way cost the client $25,850.

How does that look as a percentage? about 6%

I estimate the typical time spent to assemble plans for a 3,000 s.f. home (after design) is about 60 hrs. I would estimate the overall time spent with design included would be at the very most 120 hrs. Using these numbers that is $175 per hr. for architectural.

Now a home properly designed and in a location that is attractive will have a (lot) that could cost $500,000. The realtor sells that to the client and makes 1.5% on raw land which is $7,500. Then the realtor gets called upon to sell the project home since after construction the client realizes that he/she cannot afford the mortage/taxes. Since it was designed by a recognized architect, and the market is hot, it gets listed at $1.5 million.

This time the realtor will receive 3% and her/his pay is $45,000.


Summary:

Architect probably caves in to lower fee and only works for approx. $100 per hr, or 150 hrs. @ $100 or $15,000.

Contractor, during construction finds several insignificant errors in the plans and turns it into $30,000 worth of changes, increasing his profit to $96,000.

The realtor can cash in on a well designed, solid built home, in a hot market - sell it with only 40 hrs. invested toward that particular home and with $2,000 advertising. For an hourly wage of approx. $1,000 per hr.

Now you know why it is the realtors sitting on the beach with the fruity drinks.

(moral of story: try to receive 10% cost of construction which would be in keeping with the other trades, and send your significant other back to school to get a relators license)

[Vitruvius]

If the local market will only pay $6-7 psf - or about 5% of the construction value, I'd submit that it isn't worth taking on residential projects.

You can't cover professional salaries, liability, business risk, overheads and produce good work on that kind of fee - something has to give, and it's always salaries and the quality of work.

[Anonymous]

Do architects in USA only make the plans? Supervision is left to constructors?
If yes then you should know that the rates i mentioned for greece INCLUDE supervision too. So here in greece you actually get only 4-5% for everything.

[David Bearss]

Interesting topic.
I have been doing a streamlined process in resort communities for about 8 years providing design and construction drawings only. I team up with quality contractors and often work directly for them simplifying the communication process. Charge between 4 to 6% of construction costs plus engineering and very minimal supervision. Still hard to make money and here is the reason why IMHO; the proliferation home design in the media - tv and magazines. now every client buys these magazines and watches these tv shows and becomes an expert - in their eyes. I cannot say how many times I have had my day interrupted by a client calling to tell me about the new product they saw bob vila showcasing and have to explain that we have been using these products for years.

This year marks a change in fee structures inspired by the industrial design industry. All design is charged hourly no maximum. Since the client is the "expert" these days, then they will be able to control the design process. Once design is established and preliminary pricing established throught a multi-contractor preliminary bidding process a new agreement is signed for fixed construction drawings with all changes and revisions and construction management charged hourly.

I have worked for design build offices in the past and feel the design-bid-build delivery method is cumbersome and in appropriate for todays clients. It remains to be seen how this will play out over the year.

On a similar note the magazine Residential Architect has had a similar discussion in the past year inspired by a comment the editor made about a hypothetical project in D.C. area with 2500 sq ft house design and $65,000 design fee. Needless to say the editor has gotten a string of letters and a dose of reality.

sorry about the ramble.

[Anonymous]

When discussing fees, I think it would be helpful to know exactly what is being delivered.. In Georgia.. "Builder Sets" -- meaning design, Elevations, Roofing, plans, and typical sections - no electricals, no supervision beyond the occassional phone call -- fetch $1 to $3 from homeowners... and about 30% less from builders.. I have had to redo work done for less and it is never a pretty sight... I keep some for humor..

The builders place a constant pressure for lower rates... it's crazy. If you interact with builders long enough without constant contact with your peers you will actually start to believe $1/ft. is ridiculous.. And they wonder why their work doesn't get top priority...

It is dead end work as it is impossible to hire any help... therfore requiring hyper-productivity (The Archicad promise) All this is due to ZERO regulation here in Georgia. Incidentally I have a BSc. in Architectural Engineering and have worked here since 1988.

Stockplans a much more profitable endeavour..

What is being provided in CA for $7?

[Anonymous]

What is being provided in CA for $7? ((or it could be $5))

Typically a full set of construction documents. design, floor plans noted, dimensioned, sections, elevations, roof plan, roof truss layout (engineered supplied by truss manufacturer), electrical layout, single line drawing (supplied by electrical consultant), foundation, floor framing, (engineered - mark-ups and calcs), Title-24 energy compliance, general notes, Simpson S/W details, structural details - architectural details. Follow the plans thru till permit, supply any plan check corrections. Meetings with client, consultants. First 3 sets of blackline prints.

After permit, separate charge (hourly) for administration.

Oh, and I try to keep a good attitude. That's the hard part.