Politics, religion, money. Bring up any of these subjects and you're bound to hit a nerve. If you mention architectural fees, you'll zap about 31 nerves. That's how many e-mails I received after I quoted a hypothetical fee in my April editorial, “Where's the Architect?” Thirty-one missives constitutes a hefty e-mail bag for our small magazine. The fee in question? Roughly 15 percent of construction costs. I mentioned a typical house size of 2,200 square feet and hard costs of about $200 a foot. This is the prevailing rate in my Washington, D.C., market for a top-notch architect of high-end houses. Well, apparently I live in the Emerald City, and I need to take off the green glasses.
Many of my correspondents wrote to tell me they could retire now if they made that much per house. That fee is their American dream. No, they told me, their compensation for full architectural services (including construction observation) on a custom home amounts to what a real estate agent makes on the average sale of a house. So for their year or two of effort, these architects pull in around 6 percent. In our hot real estate market in D.C., agents rake in their 6 percent for just a couple of weeks' work (although they often split it with another agent). Now, the architects who quoted that fee tend to work in smaller cities and towns where they compete head-to-head with builders who throw in the plan for free, building designers who charge less than 5 percent of construction costs, and stock plan businesses that sell reproducible vellums for $1,000 a set. In their markets, you can buy an architect-designed custom house for the price of a loaded Toyota Camry.
Other architects told me they make anywhere from 5 percent to 10 percent of hard costs. Some well-known ones confided they make as much as 20 to 25 percent. And I happen to know construction costs can easily top $200 a foot in big metro areas, their wealthy suburbs, or vacation destinations. This is some very fuzzy math, and it adds up to a great deal of confusion on the part of professionals and clients. How can you explain why you cost 10 percent more than the guy down the street? Or how can you live on less than a real estate agent makes for a fraction of the work?
Buffeted by market forces and unmoored by the American Institute of Architects' inability to set and enforce professional fee guidelines (thanks to antitrust laws), architects have no dock in this storm. Each must decide upon and then justify those commissions to each potential client. And without a professional standard to guide them, those clients try to find their way in the dark, often ending up with the cheapest deal from the best salesperson.
What's your recourse? Because of those antitrust laws we can't just pick a price for all architects to follow and stick to it. But you can determine what your market will bear, what you can live with, and what your target customer can likely pay. There will always be a cheaper deal for them to take, you just have to be the best salesperson they talk to. You know you're worth the premium. Don't be humble, don't be shy. Tell them why.
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