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How do architects charge their fees for their services? We go over four different fee structures and their pros and cons. Read on!
For all those who are thinking about using architects to build new houses, renovate old ones, or change the designs of existing buildings, it is crucial to understand all the costs you are likely to incur as a result of the architect’s fee. And the best way to be prepared is by understanding how architects charge their fees.
Just like many other cost considerations, architects’ fee structures have a history and evolution. Currently, every architecture company has a website, and the reputable ones have a fee calculator to help users in conducting an estimate before they even discuss options with architects. Of course, this is just an estimate, and the cost is bound to change depending on many other factors.
What's Inside
Background on Architects’ Fees
Many developed countries have passed laws to guide architects on how to charge their fees. The implementation of these laws is often guided by the regulating bodies that give architecture companies licenses to operate. These laws have changed over time to bring greater harmony between builders and architects.
This is why you might have almost the same architect’s fee for your building, renovations, and design change projects. That said, it is time to take you through the common architects’ fee structures and how they are achieved.
Hourly Rates
It is considered one of the easiest and most open rates in the field of architecture. Those who charge using this concept usually indicate the amount on their website or terms and conditions when sending you the information.
There are many pros and cons that come with this method of charging. But it favors new buildings that require fewer work hours compared to design changes that take many work hours to complete. However, the approach is most suitable for designs that are big where the scope of work cannot be agreed upon with ease.
Architects who prefer this method of payment argue that they get to be paid for the services they deliver. But on the other hand, builders fear that architects might waste time on the project to earn more especially when accounting for each hour worked is not possible.
To calculate the amount the architects will take home, they multiply the hourly rate by the number of hours they work on your building project.
Pros
- The fee structure is straightforward and easy to understand.
- Some projects take fewer hours than others.
Cons
- Clients may not be able to estimate the hours needed for their project.
- The cost might go high for design change projects.
Percentage-Based Rates
This is the most common approach used by many architects to calculate their fees. Just like in the case of hourly rates, it is fair. It starts by setting a certain percentage of the total cost of the project, but there are amendments as the project progresses. Most architects charge a percentage ranging from 5 to 20 percent depending on experience and some other factors.
The figure might go higher or lower depending on the intensity of work, duration, and change of design along the way. If there are changes in the initial design that require more work, the architects and the builder might change the fee.
The beauty of this is that builders can easily make an estimate of how much they will pay architects depending on the estimated cost of the project.
Pros
- You can start on a project even without knowing the scope.
- It is flexible in determining the actual cost.
Cons
- It can be hard to get the actual budget right due to many changes.
- Some architects charge a high percentage.
Fixed Charges
Quite a number are still charging a fixed fee for their services. It is also called a lump sum fee. Here, the architecture firm and the client agree on a flat figure and justify it with the anticipated services to be offered.
This method is rarely used in large projects. So, numerous architects prefer it for small projects that involve minor renovation and design changes. Some of these projects are too small for charging using any other method that we have discussed. After all, the experts can easily determine the amount of work they will do on the projects at the end of the day.
Pros
- It is straightforward and easy to understand.
- Architects are likely to work effectively to justify their charge.
Cons
- The cost might look high for certain projects.
- Architects could lose money if they underquote.
Hybrid Fee Structure
As the name suggests, this is a fee structure that combines more than one charging concept. For example, architects could use an hourly rate on some phases and a percentage rate on others. The concept is highly flexible and must be agreed upon by both the architect and the builder. As such, they need to be clear on the reasons why they mix the charging approach.
This is applicable to large projects where the scope is hard to determine. So, they can charge a fixed fee to plan and draw the designs and then switch to a percentage when they proceed to other phases that are more aligned.
Pros
- This is a flexible approach with benefits to both architects and builders.
- It sounds fair to both the architects and the builders.
Cons
Sometimes, it is hard to convince the clients to accept it.
Choosing the Best Fee Structure
If you have a building project, you must decide on the architect’s fee structure to accept. But before that, it is prudent to speak to different firms to learn what they offer and the reasons behind it. You will be surprised to find a fair and convincing deal that will save you money. Ultimately, the type of project will determine the architect’s fee structure to use among fixed-rate, percentage-based, hourly rate and the hybrid approach.
Now that you have the insights, you will have an easy time when selecting architectural services for your projects anywhere in the world.
