What Does An Architect Cost And How Do They Determine Fees?

how does an architect get paid?.

A professional architect is well worth the price but what does a good residential or small commercial architect cost and how do they determine what to charge? I turned to the authority, the American Institute of Architects, and found that "The AIA does not publish any guidelines regarding architects' compensation and makes no recommendations about how architects or architectural firms are compensated." Though in my search I came across a listing from AIA Chicago where the value of an architect was explained, the cost was still somewhat obfuscated. As a representative trade group, you would think the AIA would guide architects in this area. After all, the cost is usually the first question asked of me by my clients. Large public projects often list fees but the well-known projects by architects like Moshe Safdie, Renzo Piano or Frank Gehry are not very helpful because of the fame premium.

Many a tract house suburbanite may not understand the value of an architect. They either choose the cape, ranch or colonial. An architect brings more than is often understood by the lay person, it isn't just a simple design someone is paying for, but the peace of mind that the building is designed correctly and can stand the test of time. Inferior building design and construction will lead to unnecessary damage and costly repairs further down the line. Cost is relative, and an architect could significantly affect the lifetime cost of the building later on down the line, ranging from repairs and maintenance or even planned expansion and additions. An architect truly provides a needed service, but we need to know what "it" is to know if they are "worth it." So, what's required to hire one with desirable qualities? 

Hours VS. Percentage VS. Square Footage

Truth be told, every architect is going to come up with different methods of billing and payment. Some architects are going to charge an hourly fee while others simply take a percentage of the construction costs. This means if the architect costs 15 percent of the construction cost, and all of the building material is going to cost $100,000 than the architect receives $15,000 as a fee. 15 percent is a bit on the high side, but this is usually only charged by the top-of-the-line architects. It is always best to do a bit of investigating to see what previous work the architect has done before. Nobody should use a first timer who charges top dollar. What is the average percentage charged? Our research indicates that 10% of a residential project cost is about right for percentage based fees.... But, read on. The devil is in the details.

Architects Who Take A Percentage of the Project

Of course, if the architect charges a percentage, it is necessary to know exactly what they are charging the percentage on. Is it for the general construction frame and building elements of the facility, or do they toss on all of the light switches and electrical tape as well? An architect shouldn't charge a percentage of certain materials that they truly aren't involved with in regards to the design. If a building is going to utilize a $10,000 light fixture, unless the architect designed the light fixture, they probably shouldn't receive a percentage on it. Looking over this is going to prevent any price gouging ahead of time. 

Architects Who Price by Square Footage

Some architects simply charge a price associated with square footage. However, the square footage billed is usually going to be a bit different from the square footage listed in the completed project. Oddly, basements, attacks and storage spaces are usually not included in the calculation for the overall square footage of a building, but an architect does include this.  After all, the architect designed it as part of the service and they should not be expected to work for free.

What is an Architect's Hourly Fee?

An architect often has junior, and senior level staff with different levels of experience and a variety of salary ranges that effect overhead. The result is tiered fees based on who is working on the project.  A principal might receive $175 an hour while the project architect or associate principal receives $135 an hour. On top of this, the project manager might receive something along the lines of $95 while the intern architect II receives $80 and the intern architect drafting might receive $65. These are just figures used to demonstrate the different prices associated with hourly fees, as it is crucial to understand different workers are all going to receive different fees.

The Bottom Line on The Cost of Architectural Services

AIA Chicago has offered the following for homeowners seeking a new home. It outlines the costs associated with residential construction and is meant to provide a guide for new home construction.

Land Purchase Price $100,000
House Construction Cost $200,000
Architect's Fee @ 10%
of Construction Cost $20,000
Misc Closing Fees $10,000
Landscaping, Driveway $12,000
Interest on $150,000
Mortgage at 8% $441,054
Taxes @ $4,000 per Year for 25 Years $100,000
TOTAL COST $847,054

So, what's your experience? With new home construction on the rise, are you willing to share your pricing structure on your blog and demystify the cost of hiring an architect?