The Anxiety and Mystery Of Architect Fees

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By Katherine Salant
Saturday, June 28, 2008

Most people have no clue how much it costs to hire an architect, and with good reason. The way most architects charge for their services is confusing.

The traditional method of calculating the fee is based on a percentage of the total construction cost.

Here's how it works. An architect has a standard percentage fee that he charges. To make the math easier, let's start at 10 percent. So if the cost to build a 2,500-square-foot house is \$500,000, the architect's fee would be \$50,000.

If you double the cost to \$1 million because you are building a 5,000-square-foot house with more design features, the percentage fee charged by most architects would go down to about 8 percent, or \$80,000.

However, if you are building an addition for \$150,000, the rate would go up to as much as 15 to 18 percent, or \$22,500 to \$27,000. As any architect will tell you, smaller jobs often require more work, especially additions that must be tailored to existing conditions. At the beginning of a job, the fee is based on the architect's estimate of the total cost.

If you shop around, you will find that the standard percentage fee varies from firm to firm, as do the standard services offered. In the Washington area, the standard fee can be anywhere from 8 to 18 percent of construction cost.

At the lower end, the architect offers fewer design services and creates a less detailed design. For example, while the architect will design the overall house, the homeowners will work with a kitchen designer at a cabinet dealer who will design their kitchen. They will make most of the finish selections themselves and will work more closely with the builder.

At the higher end, the architect designs everything, including the kitchen, helps the homeowners with selections and works with the builder all the way through construction. The architect's percentage fees can also go up if a project is in an historic district, which imposes many requirements on new construction, or in an area that requires approvals from a fine arts commission.

This method of calculation would be easier to grasp if homeowners understood construction costs and how design choices can affect them, or what exactly they would be doing on their own if they worked with a firm that charges lower fees. But going in, most people have no sense of this.

To make fees more understandable, some architects now charge by the hour. It's a method of accounting that most people are familiar with and one that many clients use when billing for their own services.

It's possible to combine the hourly and percentage systems. That's what McLean architect Margaret Rast and District architect Norman Smith have done. Initially, they charge by the hour as they develop the basic design concept if clients are more comfortable with that. They switch to a percentage of construction costs if the clients decide to proceed.

Both said hourly charges are easier for most people to grasp. But, they emphasized, the biggest block to understanding fee structures and nearly everything else at the beginning of a job is anxiety. Their clients are contemplating spending a huge amount of money as they take a giant leap into the unknown.

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