How do architects charge for their services?
As the site, brief, and budgets from project to project can differ greatly, architects generally offer a range of ways to charge for their services:
Lump Sum or Fixed Fee based
This is a fixed fee to you based on the amount of work involved. The advantage to the client is that they know the cost upfront, and this is independent of the cost of the building. The disadvantage to the architect is that the architect carries the risk of losing money if the fee is not adequate. Most fixed fee arrangements have an additional hourly fee component to help balance the risk of under quoting. If the scope or the brief of the service is increased, additional fees are payable.
Percentage of Construction Cost based
This is a fee that the architect will charge based on a percentage of the final building cost, to complete all the work that is required. Generally, small projects attract a higher percentage, and large projects attract a smaller percentage. The scope of the services can vary, with each stage of work the architect does having its own percentage charge. The system is reasonably fair to both the client and the architect as the final fee payable to the architect is based on the contracted final cost of construction.
Hourly Rate based
This is a do-and-charge system. Architects can simply charge for the work they do on an hourly rate basis. Advantage is that clients don’t have to pay any additional margin.
Combination of Fixed and Hourly Rates based
This system gives the client a good idea of the costs involved, and generally allows for the final cost of the work to be adjusted to suit the scope of work and the level of service provided. The architect is generally more keen quoting this way because it reduces the risk of under quoting.