Architectural Fees + Soft Costs: What You Need to Know
One of the first questions anyone asks when considering whether to remodel or build a new home is how much will it cost? Starting a project like this can feel like a step into the unknown, especially if you’ve never undertaken a large-scale build or renovation before. And for many homeowners, they are only thinking in terms of construction costs. But, long before you get to abatement or breaking ground, a lot of money will already have been spent. These are your Soft Costs.
Soft costs on a custom home build can be broken up into roughly 4 main parts:
1. CONSULTING COSTS
These remain pretty consistent regardless of the project budget so we’ve listed fees here in dollar amounts rather than percentages:
Surveyors: Depends on whether you’re building new or adding on and whether you are on a flat or sloped lot:
a. Boundary (Flat Lot) or Topographic Survey (Sloped Lot): $2,750-$8,500
b. Soils Report (Sloped Lot): $7,000
c. As-Built survey: $3,500-$5,000 (dependent upon the size of the existing home and number of buildings)
Engineers: Required engineers and associated costs can vary greatly based upon the project scope:
a. Structural Engineering: $7,000-$12,000
b. Civil Engineering (Sloped lot): $6,000-$8,000
c. Energy calculations (Title 24): $500
2. FIXED ARCHITECTURAL SERVICE FEES
At LETTER FOUR these phases include Due Diligence, Conceptual + Schematic Design, Design Development, and Construction Documents. The total cost of these fees are usually estimated at a percentage of your construction costs:
-If your build is $500,000 - $1 million, then your fixed architectural fees will be about 9% - 10%.
-If it is $1 million - $2.5 million, then you can anticipate 6% - 9%.
-And $2.5 million+ will likely be about 5% -6%.
3. CITY FEES
Plan check + Permit Fees: 1.5%-2%
4. ADDITIONAL HOURLY SERVICE FEES
Here at LETTER FOUR we bill on an hourly basis for interior design services, plan check and expediting, and construction administration time spent by architectural staff. These fees can vary greatly depending on the project scope and client’s desire and ability to take on some of this work. Generally these fees amount to 3%-10% of the construction cost.
As a Design-Build firm in Los Angeles, we guide clients through the project from initial inception to move in, and everything in between. We pride ourselves on our clear and comprehensive process, so you know what to expect every step of the way.
With this in mind, we’re demystifying the way architectural fees are set and charged. Here’s everything you need to know about residential architect fees—for both new builds and renovations.
First things first, what exactly are architectural fees for?
Most residential architectural fees include a set “package” of services tailored to each homeowner's needs and wishes.
The price will reflect the complexity and number of services required, as well as site conditions and deadlines. Expenses tend to increase with a more comprehensive range of professional services, an expedited timeline, or complex project goals or site.
It is often simplest to look at average architectural fees as a percentage of construction costs. It is industry standard for these fees to be about 10%-12% of the project's construction cost, though they can range from about 6% to 20%. The lower end of the range tends to be for larger projects with higher construction costs, while the higher end is for the opposite. This is because there is a certain amount of architectural work that needs to go into any project, even those with a lower construction cost, hence the higher percentage of that cost. There is an economy of scale with larger projects that help reduce the architectural costs as a percentage of the construction cost.
While every architectural firm charges a little differently for their services, their fees are typically determined by level of service, complexity of the project, size of the project, and construction budget/estimated costs. They are also likely to have a mix of fixed fees and hourly billing. Whilst each architectural firm may give project phases and groupings of services a different name, the important elements are what’s included and whether deliverables and expectations have been clearly communicated. Let’s take a look at each in turn.
Let’s learn a little about “Basic Services”—i.e., the things architects must do for each and every design.
They are the “standard” phases of an architectural contract, including due diligence, conceptual and schematic design, as well as design development and construction documentation. Exactly what these “basic services” constitute should be clearly outlined and explained by your architect.
Above and beyond the Basic Services, you can expect the following services in each of these levels:
As a rule of thumb, most homeowners should consider engaging their architect to the maximum level their budget will allow.
Why? This is because architects come with a wealth of experience and knowledge, not just about the technical aspects of construction. They understand how to deal with each phase of a project, manage construction teams and tradespeople, as well as planning requirements and interior finishes.
Architects can offer full project management services with Tier 6 options if you have pre-existing work or family commitments. This extra help can be a project’s saving grace if difficulties arise – the difference between success and spiraling costs.
Ultimately, with the highest level of service, architectural teams ensure homeowners always receive what they envisioned and paid for.
To understand the fees involved with each grade, here’s a breakdown for both new-build projects and renovations.
While every architectural firm will have its own pricing and fee structures, the average amount charged for each tier (listed as an approximate figure) is below. This is calculated as a percentage of total project costs.
These percentages will also change according to the “band” a project falls within.
Taking Tier 1 Basic Services as an example, small projects costing up to $100,000 might face a slightly higher fee range (say 12%) to cover the architect’s work. This percentage may fall to 10-11% for projects up to $500,000, around 9% for projects up to $1 million – all the way down to 7% for projects valued between $20 and $50 million.
As always, ask your architect about their fee structure and what services are included.
So, what does this mean in practice? Here are two examples:
EXAMPLE #1:
New Custom Home - A completely new construction, high-spec residential project with 3,000 square feet, 4 bedrooms, 3 bathrooms, on a flat lot.
Estimated Construction Cost: $1,000,000
The clients work full time and don’t have time to run to showrooms or stop by the site. They’ll need a full level of service, including finish and fixture selections, permitting, construction administration, and landscape design.
Let’s break it down:
1. Consultant Costs: $19,000 +/-
2. Architectural Fees for Basic Services: 8% = around $90,000
3. City Fees: 1.5% = around $15,000
4. Fees for Hourly Services: 6% = around $60,000
Using the figures above, soft costs for architectural, engineering, landscape, interior design, and city fees would total $184,000, or roughly 18% of the project construction cost.
EXAMPLE #2:
2nd Story Addition - Addition of a primary suite and 2 additional bedrooms with a Jack + Jill bathroom on a hillside property
Estimated Construction Cost: $850,000
This homeowner is confident in their ability to select finishes and fixtures. That said, there are additional considerations and costs for a remodel on a hillside.
Let’s look at estimated soft costs for this client:
1. Consultant Costs: $29,000 +/-
2. Architectural Fees for Basic Services: 9%, around $68,000
3. City Fees: 2%, around $17,000
4. Fees for Hourly Services: 5%, around $42,500
Using the figures above, soft costs for architectural, engineering, landscape, interior design, and city fees would total $173,500, or roughly 20% of the project construction cost.
EXAMPLE #3:
Major Remodel: 2000 square foot home, no new square footage added
Estimated Construction Cost: $350,000
This is a smaller project, but the home is being gutted and requires selecting finishes for a kitchen and two bathrooms. We’ll be vaulting ceilings and opening up the floor plan requiring structural engineering, framing, and foundation work.
Let’s look at estimated soft costs for this client:
1. Consultant Costs: $13,500 +/-
2. Architectural Fees for Basic Services: 12%, around $42,000
3. City Fees: 2%, around $7,000
4. Fees for Hourly Services: 6%, around $21,000
Using the figures above, soft costs for architectural, engineering, landscape, interior design, and city fees would total $82,500, or roughly 23% of the project construction cost.
The level of service remains the same for renovation projects; however, due to these builds' complexity, costs are often greater. From an architect’s perspective, it’s usually simpler to build new rather than adapt existing structures.
Home renovations require additional record drawings, which require additional consultant costs which are in addition to the architect’s fees. These projects will also necessitate more in-depth due diligence stages, to understand and record the existing structure and conditions. This will allow your architect to comprehend and appreciate the existing building fully so that plans can appropriately build on or remove elements as necessary.
Percentages will vary according to the complexity of the project but are generally 2-5% higher than new-build projects.
The architect’s fees are not the only design-related fees that you’ll need to account for before starting construction. Additional fees typically include surveying costs, consultant fees for structural and civil engineering, plan check and permit fees, and more. As a percentage, these fees vary greatly depending upon the complexity of the site and what services you choose to sign your architect on for. Contact Letter Four about your project and estimates for additional fees.
City fees typically include plan check fees, permit fees, costs for special approvals and for what we call “clearances.” Clearance fees tend to be for fire department reviews, storm water, bureau of engineering, and other departments. These are the less significant portions of the total costs. Through the course of the pandemic many cities have adopted online payment softwares so that clients can pay these fees directly without a markup.
The relationship between architects and clients is one of the most important aspects of any construction project. At Letter Four we proactively work alongside clients from the very outset. We establish specific needs and design preferences, as well as allowing for full review and approval at every subsequent stage—from conceptual design to pricing, construction documentation and interior finishes. (add link to Construction Fees BLOG)
Architects’ fees reflect not only their years of professional education and training, but also their real-world experience in designing and building houses day-in-day-out. With an unrivaled mix of creative and technical expertise, architects bring residential builds and renovation to life—creating functional, beautiful and long-lasting spaces for you and your family.
Letter Four is a full-service architectural design and construction firm based in California. We fully understand each and every project is completely unique and offer stand-alone architectural services as well as the full design-build process and project management.
If you’re embarking on your own construction project, get in touch with our expert team today to get a free consultation. With seamless integration of architectural and general contracting services specifically tailored to your goals—our mission is to design and build great spaces and turn your dreams into reality.
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