Compensation for Architectural Services
One of the most difficult questions for an architect to answer is how much it will cost for a homeowner to hire an architect. While there are precedents in the profession of architecture for customary fees for architectural services based on standard practices, the amount of compensation appropriate for each project varies based on the size of the project, complexity of the project, the level of material/finish quality, the level of detail sophistication and the expectations for the level of professional services and architect involvement required by the homeowner.
In general, architects are compensated for their services as they are performed. The method for determining how the architect will be compensated for the work they perform follows three primary forms:
Compensation is based on a fixed dollar amount established between the homeowner and architect for the project. Often times when the homeowner is working with a limited budget to fund the construction of a project and the associated project costs, hiring the architect based on a stipulated sum will help the homeowner stay within a fixed budget. The architect will tailor their level of service to work within the stipulated fee budget. Therefore, the homeowner should realize that it is in their best interest to provide compensation adequate to fulfill their expectations and the unique needs of their project.
Hourly Fee Basis
Compensation is based on the actual time worked on a project billed at standard hourly billable rates established by the architect for designated personnel with varying levels of service and experience. Each hour worked on the project is billed to the homeowner. Hourly fee compensation is often used for remodelings and other projects where a number of unknowns exist at the outset of the project, making it difficult for the architect to predict a scope of work. It may also make sense to use this approach for Construction Administration or specialized services.
Percentage of Construction Cost of the Project
Compensation is calculated by applying an agreed-upon percentage to the estimated or actual construction cost of the project, whichever cost is most certain at the time the calculation is made. The percentage applied to the calculation is often based on the architects past experience working on projects of a similar type, size and complexity; or customary standards used broadly across the architecture profession for a project type.