The real world

Residential Architect, June, 2005 by Peter M. Rockwell, Donald Mallow, Robert Kiejdan

I disagree with your premise that "because of those antitrust laws we can't just pick a price for all architects to follow and stick to it" ("The Charge Brigade," August 2004, page 13) and suggest residential real estate commissions as a pricing model.

A real estate commission is, in most U.S. markets, generally accepted to be 6 percent of the sale price of a property. Why is this fee so widely accepted? It is very arguable that a real estate agent provides the same value for this fee that an architect would. In terms of billable hours and expenses (to be generous), the fee per hour frequently approaches that received by class action attorneys. Why are all brokerage firms within a given area able to charge the same fee without being subject to antitrust action? Why do most brokerages within the industry charge the same fee without charges of collusion?

Perhaps the architecture profession should look to real estate brokerage as its potential pricing model. If the AIA lacks the influence in Washington and in the public perception to gain national acceptance of a universal fee, perhaps it could engage the National Association of Realtors to lobby on its behalf.

Peter M. Rockwell

Bloomfield, Mich.

the setting of fees is not a simple matter of percentages alone. I have found that there are three ways to charge for architectural services:

1. A percentage, but that will vary based on the complexity of the project, the amount of detailing, the design of extensive built-ins, etc. In addition, I have found that the setting of a fixed fee from preliminary drawings to completion of the project poses a risk for the architect during the construction phase. I am perfectly willing to work on a percentage basis up to the completion of the working drawings and specifications because that is my own work and time, but I am not willing to be bound into a fixed percentage fee during construction when I have no control over the work schedule of the builder, which

can be inefficient and can drag out the construction time beyond my control. During the construction phase, I charge on a per diem per visit to the site and an hourly rate for other related work. Since being badly stung in a project that was poorly managed by the builder so that it went nearly a year longer than necessary, I never set a percentage fee for the entire scope of work.

2. A straight hourly fee for the entire project. Granted this requires trust on the part of the architect and owner. This is a fee arrangement suited to large-scale residences. I find that that owners often do not feel they should pay (in a percentage fee arrangement) that percentage difference if a more expensive material is chosen rather than one less costly. The question asked: "If we want a ceramic tile for $20 per square foot, why should we pay a percentage of the difference between $20 and $5?" I am happy to work on this basis because I am being compensated for my time.

3. A negotiated lump sum for the work through working drawings and specifications and a per diem and hourly rate during construction. I find that owners of modest means prefer this arrangement. They know what to expect, with the understanding that requested substantial changes are to be paid in addition. The architect may not earn as much this way, but for people who want a house for $350,000 or $400,000, even a 10 percent fee for the drawings and specifications represents too much for them. If the owners are good clients and receptive to good design it may be worthwhile for the architect to work this way. Damn few of us are going to get rich in this profession anyway.

Donald Mallow, architect

Leonia, N.J.

real estate brokers get a 6 percent commission when they sell a house. Average home sale today: $200,000. Commission: $12,000, no liability. The average architect fee is 3 percent, which equals $6,000. The real estate agent walks away at closing, but the architect is professionally responsible in some states for 20 years.

The average home inspection fee is $350, which equates to $175 per hour, with near zero liability. If it was a poor inspection, the architect is called in. But the buyer doesn't want to pay a consultation fee.

Why are architects afraid to charge for their time? A car dealer charges you for a diagnostic checkup. Architects are professionals no different from lawyers, accountants, and doctors.

Robert Kiejdan, architect

Northfield, N.J.