How Do Architects Calculate Their Fees?

A common question we get during our initial meetings with new clients is ‘how do architects calculate their fees?’.  In this blog post we will briefly explain the three main methods architects use to calculate their fees, then explain how we calculate our fees at Dig Design.

Percentage Fees

This is probably one of the most common method architects use to calculate their fees.  Calculating fees this way involves applying a percentage to the cost of works (construction cost excluding GST).  The percentage used to calculate the fee is on a sliding scale.  The higher the cost of works the lower the percentage.

Myth:     Architects choose expensive detailing and finishes to increase the cost of works and their fee.

Reality:  Most architects will not increase fees unless there is an increase in scope, or a reluctance from the client to realistically link the brief to the budget.  Ultimately, we want you to build and love your dream home.

Lump Sum Fees

Lump sum fees are a fee negotiated and agreed to by the client and the architect for the delivery of specific services, they are also known as fixed fees.

Myth:     Architects pad their fixed fee with unnecessary costs.

Reality:  Architects with a strong body of experience are well skilled in knowing what is required on a project and therefore set their fees accordingly.   Ultimately, we want you to build and love your dream home and we want to be the ones to help you get there.

Time Charge Fees

Time charge fees are calculated using an hourly rate multiplied by the number of hours spent providing services.  This method is similar to that used by other professional service providers like lawyers and accountants.

Myth:     Architects pad their time charge fee with hours not worked.

Reality:  Architects keep a record of hours worked and will pass that information on if requested.  If you request an hourly rate fee, we will give you an estimate of hours we expect to spend on your project and let you know along the way if any of your requests have a time and cost implication.  Architects will often apply a cap if it is appropriate.

How We Calculate Our Fees at Dig Design

At Dig Design we use a hybrid model for calculating our fees, with the occasional project specific anomaly.  Our fees are made up of two components, design and documentation + contract administration:

Firstly, for design and documentation, we calculate our fees as a percentage of a construction cost estimate, based on the scale and scope of the proposed work … and then we fix it!

Should the scope of works be increased from the original agreement, we may need to recalculate our fee.  There are a couple of triggers for hourly rates which are outlined in full within our fee proposals.

Secondly, at the construction phase if you engage Dig Design for Contract Administration, we calculate our fee as a percentage of the signed contract price (between you and the builder).  This percentage is outlined in our fee agreement.  There are occasions where we might charge an hourly rate rather than a percentage due to the small scale of the project, or where the client wishes to deal directly with the builder themselves and is only after advice when required. 

Contract Administration services are an add on service, so itemised separately in our fee proposal.  Some people might feel confident to deal with the builder directly and only want advice as required.  Others might see the value in ensuring that what is built is what we have designed and wish to engage Dig Design for this service.

Within our fee proposal, we provide fee options which we refer to as Service Packs.  Typically we offer one that includes architectural and interior design services, one that is for architectural services only and one for our Brief + Possibilities Package, which is a preliminary feasibility service plus extras.  some people wish to engage Dig Design for our Brief +Possibilities Package as a lead into one of the other Service Packs, in which case the BPP fee is deducted from the architectural/interiors fee.

Take a look at what’s included in our Service Packs.

Contact us to book a meeting to discuss your project and request a fee proposal, or find out more about our Brief + Possibilities Package.

10 Things You Need to Know Before Designing Your [New] Home

We know it can be overwhelming when starting to plan for your dream renovation or [new] home.  Here we have put together this list of things you need to know before designing your dream renovation or [new] home, covering some key points to consider at the beginning of your journey. 

Don’t feel you need to know all the answers right now, our team at Dig Design will be there to guide you through the process from start to finish. 

With planning and considered discussion, you will be in a position to make good decisions with minimal stress and make the planning of your dream renovation or [new] home a truly enjoyable experience.

The first step is to find the architect that’s right for you.

Download our handy guide here, then give us a call to discuss your home.

Contact us at Dig Design to find out more about our architectural design process and how we can help you meet your goals.

Is Now a Good Time to Renovate My Home

For most of us our home is the biggest investment we make in our lifetime, so it is only natural to ask yourself is now a good time to renovate my home?  Or, can I design my home now and build later?  In this post we examine why now may just be the best time to start planning your dream renovation or new build.

For many, particularly those of us in Melbourne, 2020 and 2021 saw us retreat to the safety of our homes.  It was a time of prolonged togetherness like we had never experienced before.  Kids at the kitchen dining table learning, parents at makeshift desks working, soups on the stove and sourdough in the oven.  Friday night movies on the sofa, game night Wednesdays and a little too much screen time … it really was an extraordinary time.

Some of us loved it, some of us went stir crazy at the site, size, colour and location of our four walls!

I think most of us at some point during the pandemic imagined our lives lived in improved versions of our homes.  Home offices, huge windows with natural light streaming in, strong open connections to our backyards, bigger kitchens, larger living spaces, spaces where we could be together and spaces where we could be apart …

Some of us jumped into action on those imaginings and started working with our architects on redesigning our homes to suit our changed lifestyles.  Some of us acted immediately and are excitedly coming to the end of our builds, others are already enjoying our renovated or newly built homes.  Some of us hesitated in an uncertain world and some of us are done waiting and now looking for the right architect to bring our imaginings to life.

Housing Market

The housing market boomed and homes that ticked all our boxes where in frenzied demand.  Paired with never-before-seen low interest rates, housing prices went through the roof. As with all things that go up at a rate above the norm, we are now experiencing the correction of that rapid and unsustainable price rise.

Whilst there is no denying that housing prices have begun to decline, we are still ahead of where we were pre-covid.  The real estate market is full of ups and downs and plateaus in between, always has been and always will be.  On the below graphic from the REIV, published at the end of the September 2022 quarter, you can see the rapid incline in housing prices, and now the correction, compared to where we were pre-covid.

If you purchased a home you thought ticked all your boxes at low interest rates, inflated prices and a seller’s market (at the top of that curve), you might now be feeling some regret.  If you renovated your home you might be feeling pretty chuffed right now.  But what if you hesitated?  What now?

You’re in luck … now is the perfect time to plan your dream home.

Time to Plan

There are many different stages involved in planning your dream home, with the build being one of the final stages.  Planning your dream home doesn’t mean you need to build right away, in fact holding on a build date has many advantages not the least of which is giving yourself time with your architect to get the design of your home just right.

You can spend time writing your design brief, a document that clearly sets out all that you want your architect to know and understand about your unique family dynamic and what is important to you to include in the design of your [new] home.

Your design brief is a live document and can change but it’s the starting point for discussions with your architect, or when selecting your architect.  There are pragmatic inclusions such; your budget and how many bedrooms and bathrooms you’d like, but what you really want to understand are your why[s].  For more information on how to write a brief, follow the link to our post about design briefs and download our guided templates for writing a brief.

Ahead of the Market

The building process from start to finish takes time, particularly if town planning approval is required.  Starting the design process now whilst the market is quietening can put you ahead of the market when the time is right for you, putting you in a good position to make the most of competitive prices, your choice of builder and potentially a quicker turnaround for approvals and permits.

Planning your [new] home ahead of time, having a design and documentation package ready to go, makes it possible to move forward with your build when the timing suits you, rather than rushing the design and documentation process when you are looking to start your build. 

The design and documentation process is a fraction of the construction cost, as we say, don’t let the fear about what the fee might be stop you from being pleasantly surprised by what the fee actually is. 

Now is the perfect time to renovate your home and moving forward with planning your dream renovation or new build will give you the time needed to properly assess your why[s], develop your brief and adequately consider the design.  You are not committing to building right now, but you will be ready to move forward with your build when you decide the time is right.

Improving your lifestyle and increasing the value and useability and energy efficiency of your home is always a good move.

Contact us at Dig Design to find out more about our architectural design process and how we can help you meet your goals.

[New]
[New]