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.
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.