Architectural plans for homes

November 18, 2012
Architectural Plans For

moneyI have written two previous posts on the subject of architectural fees: Architectural Fees- Part One: this posts talks about the different ways architects can develop their fees (hourly, percentage of construction costs, etc.) Architectural Fees – Part Two: this posts elaborates a bit more on Part One (more on hourly rates, per square foot fees, and combination fee structures) but I introduce the concept of “Skin in the Game.” I like to tell clients that everyone needs to have skin in the game, that both architect and client are accountable to one another and while we both have something to gain, we both also have something to lose. That’s what I was thinking about as I sat down to flesh out this post. Alternate ways of setting up a fee structure that helps the client feel like they have more control over the architectural fees that could be generated while giving the architect the opportunity to plan for and cover their expenses for the services they are providing. One of the issues that we come up against all the time is that during the interview process, most clients have just a few things to base their selection criteria – design style, personality, and professional fees. More times than not, we don’t struggle with the design style and personality portions, people are generally familiar with our design style and as an office, we are a fairly likable bunch. That just leaves the last bit – the architectural fees. In our office, almost all of our contracts are based on a percentage of construction costs. Most architectural firms who subscribe to this way of determining their professional services fee fall into the 8% to 15% range. This means on a $100, 000 dollar construction cost project, the architectural fees would fall in the range of $8, 000 to $15, 000 range – pretty simple really but one of the things that can always cause confusion is what exactly counts as part of the cost of construction. The other issue is the level of service that Firm ‘A’ at 8% charges and the level of service that Firm ‘B’ at 15% charges … and for these new potential clients, they can’t always tell (or even understand) why they would hire Firm ‘B’ when they like Firm ‘A’ and they are so much cheaper!?! Since I am more of a Firm ‘B’ service provider (and our professional fees reflect that) we lose out on a number of project to less costly architectural firms. This drives me crazy for the simple reason that the additional services I generally provide are worth far more than the delta of fees between the two firms might suggest. That’s where my idea of skin in the game is evolving. What I have been thinking about is how I can create a menu of services that allows the potential new client to more readily recognize the value of the service they are receiving. If I am going to provide less service, then my fee should reflect that right? The problem with this model is that most people think they don’t want these “extra” services but in the end, almost always see their value … but at this point, it’s too late and some other firm is working on their project. So by creating a menu of services, we can get down to a more competitive fee – again, seems pretty straight-forward to me.

Source: www.lifeofanarchitect.com
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