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Exploring Payment Options for Architectural Services

Exploring Payment Options for Architectural ServicesArchitectural design favors the artistic end of the spectrum, and our trade is partial to providing different options and possibilities for a given design problem.  It is difficult to quantify an Architect’s services, because the end result (and the process of getting there) is not a simple answer, but rather the result of developing an idea within given parameters, such as site constraints, users, program, budget.

But, alas, there must be some method of financial compensation that structures the processes of architecture.  Below, we discuss four pricing methods that may be utilized in an Architect’s fee structure.  We offer recommendations for when to implement each payment method, as the proper method varies according to the size and scope of your project.

Cost per Square Foot

Certain Architects will “design” your home by picking from stock floor plans and slightly modifying the footprint to suite your lot size.  Generally, with these stock plan projects, the outcome will be a standard residential form, built with an economy level of construction.  Because the complexity of both design and construction are removed from these residences, a cost per square foot payment method is a fair payment structure.

Looking beyond these kinds of projects, we recommend a cost per square foot payment structure for certain initial architectural services, such as documenting existing field conditions and drafting existing floor plans.

Per Hour

We recommend an hourly fee structure for additional services.  The umbrella of an “additional service” is very broad, as the term encompasses a change to the architectural design, or items unrelated to the construction of a project, such as presentation documents or three-dimensional visualizations for marketing purposes.

With a “per hour” pricing method, each member of the design team is allocated a different rate.  The rates correlate to the member’s experience varying from Partner, to Project Architect, to Junior Designer, and Intern. 

If a client wishes to utilize an hourly payment method, certain milestones should be agreed upon.  With these markers clearly identified, the Architect will notify a client when a certain level of hours, or a certain cost has been reached, to avoid any shock associated with a per hour bill.

Percentage of Construction Cost

The larger or more complicated the project, the more time it takes to design and prepare. Therefore, percentage of construction cost is often the best pricing method for both the client and the Architect.  The percentage is a fluctuating number that varies depending upon the size and scope of the project – usually between 5 to 15%.  It is important to note that an Architect’s responsibility includes maintaining construction cost within a certain range of the client’s budget, which can be achieved with accurate detailing and specifications.

Stipulated Sum

This pricing method is founded on a set price for either the entire project, or a designated portion of a project.  This method is best for clients who want a fixed price for architectural services – the total price is agreed upon up front, and if the design scope does not change in any way, neither does the cost.   An Architect is able to give a stipulated sum based on his/her’s experience doing the same kind of project.  An Architect can quickly call upon past happenings of similar size and desired level of finishing details to provide an accurate bottom line.

It is not uncommon for an Architect’s fee structure to incorporate different methods of billing to reflect the different points of the design phase. Initial services, like measuring existing conditions, may be billed as cost per square foot, and as the design moves toward construction, a percentage of construction cost or stipulated sum may be agreed upon, while any additional services may be billed hourly.

Please feel free to add thoughts in the comment section below!