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Subject Author Date
Fees for custom residence Gordon Feingold 04-14-2008
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Posted by Gordon Feingold on April 14, 2008, 1:58 pm
I'm looking at having a custom contemporary home designed and built in
Santa Barbara, CA, where construction costs for this type of work are
purportedly at ~ $500/sq ft. (High-end is substantially more than
that.) I'm targeting ~ 4500 sq ft for the main house at ~ 1000 sq ft
for garage/utility. So I'm facing construction cost of ~ $2.55
million. The lot is flat and clear.

The initial quote from my favored firm for architectural fees was 15%,
just shy of $400K, inclusive of engineering. When my eyes popped out
of my head, this went down to 12%, exclusive of engineering, still
well over $300K.(These include CM.)

The same house built in Anytown, USA would probably cost about half to
build, if that. I'm having a very hard time trying to understand how
the fee can be justified on an hourly basis. Does it take twice the
number of hours to design the place here as opposed to Anytown? I
think not. E.g., at $95/hr does it take 1,000 hours to prepare the
construction documents?

I really like the firm and the lead architect. I'm just having a hard
time understanding the fee. You know, if they'd said "It's $175K for
the actual labor and we charge $150K for the artistry" I could mull
that over, but trying to justify it on a purely hourly basis based on
the insane local construction cost makes me feel like I'm being taken
advantage of.

Am I being unreasonable in my expectations? Are they?

[ For the $1M+ I'd save, maybe I should have the place designed and
built in Anytown and helicoptered over here! ; > ]


If God hadn't meant for us to eat animals, why did he make them out of meat?

Posted by Pierre Levesque on April 14, 2008, 3:47 pm

> I'm looking at having a custom contemporary home designed and built in
> Santa Barbara, CA, where construction costs for this type of work are
> purportedly at ~ $500/sq ft. (High-end is substantially more than
> that.) I'm targeting ~ 4500 sq ft for the main house at ~ 1000 sq ft
> for garage/utility. So I'm facing construction cost of ~ $2.55
> million. The lot is flat and clear.
>
> The initial quote from my favored firm for architectural fees was 15%,
> just shy of $400K, inclusive of engineering. When my eyes popped out
> of my head, this went down to 12%, exclusive of engineering, still
> well over $300K.(These include CM.)
>
> The same house built in Anytown, USA would probably cost about half to
> build, if that. I'm having a very hard time trying to understand how
> the fee can be justified on an hourly basis. Does it take twice the
> number of hours to design the place here as opposed to Anytown? I
> think not. E.g., at $95/hr does it take 1,000 hours to prepare the
> construction documents?
>
> I really like the firm and the lead architect. I'm just having a hard
> time understanding the fee. You know, if they'd said "It's $175K for
> the actual labor and we charge $150K for the artistry" I could mull
> that over, but trying to justify it on a purely hourly basis based on
> the insane local construction cost makes me feel like I'm being taken
> advantage of.
>
> Am I being unreasonable in my expectations? Are they?
>
> [ For the $1M+ I'd save, maybe I should have the place designed and
> built in Anytown and helicoptered over here! ; > ]
>
>
> If God hadn't meant for us to eat animals, why did he make them out of
> meat?

For a project with a budget of over $1mil, 8 to 10% should get you a
standard "B141-Standard Form of Agreement Between Owner and Architect".
That's all inclusive up and including Contract Administration (CA) services.
CA mainly consists of contractors payment requisition reviews, change order
preparations, change directives and issuing Certificate of Substantial
Completion other tasks associated directly to the administration of the
construction contract. Site visits duirng the CA phase are limited and not
intended to administer and oversee the work of the contractor. That's what
Construction Management is for. The "B801-CMa Standard Form of Agreement
between the Owner and Construction Management" is far more time consuming
and is very much worth a few more % points for all the reasons mentioned.

Google each contract and try to get familiar with how much work you will be
receiving from each contract.

B141-Standard Form of Agreement Between Owner and Architect
http://tinyurl.com/6aczhy

B801-CMa Standard Form of Agreement between the Owner and Construction
Management
http://tinyurl.com/685kaf




Posted by RicodJour on April 14, 2008, 3:55 pm
> I'm looking at having a custom contemporary home designed and built in
> Santa Barbara, CA, where construction costs for this type of work are
> purportedly at ~ $500/sq ft. (High-end is substantially more than
> that.) I'm targeting ~ 4500 sq ft for the main house at ~ 1000 sq ft
> for garage/utility. So I'm facing construction cost of ~ $2.55
> million. The lot is flat and clear.
>
> The initial quote from my favored firm for architectural fees was 15%,
> just shy of $400K, inclusive of engineering. When my eyes popped out
> of my head, this went down to 12%, exclusive of engineering, still
> well over $300K.(These include CM.)
>
> The same house built in Anytown, USA would probably cost about half to
> build, if that. I'm having a very hard time trying to understand how
> the fee can be justified on an hourly basis. Does it take twice the
> number of hours to design the place here as opposed to Anytown? I
> think not. E.g., at $95/hr does it take 1,000 hours to prepare the
> construction documents?
>
> I really like the firm and the lead architect. I'm just having a hard
> time understanding the fee. You know, if they'd said "It's $175K for
> the actual labor and we charge $150K for the artistry" I could mull
> that over, but trying to justify it on a purely hourly basis based on
> the insane local construction cost makes me feel like I'm being taken
> advantage of.
>
> Am I being unreasonable in my expectations? Are they?

I don't understand your post. "If built in Anytown..." Well, it
won't be, so what's the point of wasting brain calories on woulda,
coulda, shoulda? If you don't like the price, and you don't think
it's worth it, you're free to shop around. That's the free in the
free enterprise system.

If they are your "favored" architectural firm, it's probably safe to
say that they are high on some other people's lists. Supply and
demand (see above). You have but one chance to pick an architect for
this house, they have a waiting list.

Regarding the hours involved - what does that matter? You're paying
for a design, not pool cleaning. Say one architect spends 100 hours
on the design, you love it, and he charges you $100K, and another
spends 50 hours (or 200), you hate it and he charges $100K, which is
the better _value_ to you. Please note I did not say cost - value.

I think you would also probably agree that someone who drops a couple
of million on a house is probably going to expect more from it that
someone who drops 25% of that. Similarly, they'll probably expect
more from the architect, and very possibly the architect is allowing
for a substantial amount of time for hand holding through the project.

The bottom line:
Could you get a lower design price? Yes.
Would you be as pleased with the design? {insert _your_ best guess
answer here}

R

Posted by Gordon Feingold on April 14, 2008, 5:38 pm
On Mon, 14 Apr 2008 12:55:48 -0700 (PDT), RicodJour


>
>Regarding the hours involved - what does that matter? You're paying
>for a design, not pool cleaning.

As I said, if it was put that way instead of portraying that it will
for example actually take 1,000 hours to do the construction drawings
it would have sat a lot better and wouldn't have triggered my raised
eyebrows.


Thanks for your good comments.

Gordon


Posted by Gordon Feingold on April 14, 2008, 8:24 pm
On Mon, 14 Apr 2008 16:13:00 -0700 (PDT), RicodJour


>Tell your architect I'll sell their jobs for them - I'd do a better
>job than they would. I know you wouldn't be posting here if I spoke
>with you. I would have alienated you immediately, or you would want
>to have my children. None of that middle ground stuff for me. If you
>don't love me and my work, I don't want to work with you.
>
>R

That's the way I want it to be as well. Look, I do custom software,
big projects, and I'm almost unique in that I quote them at a fixed
price up-front from a detailed spec and I bill milestones based on
that price. We spend zero time arguing about this or that fee and 100%
of the time doing the project, with mutual peace of mind. Oh, and I
deliver.

It isn't paying a big fee I'm having a hard time with as much as the
way it was "justified" and the indeterminate nature of it. I can live
with "it's a lot because we're excellent and we deliver" but I have a
hard time with "this item will take 1000 hours" when I know it won't.
That tends to break the trust I want and need to have in them.

G

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