Most of our residential clients have never engaged an Architect before. Commencing a project can be daunting for a lot of clients as it is most often the largest financial commitment they have ever made. Below are some of our thoughts from years of experience, anecdotal evidence and stories from colleagues in the industry. It isn't written to be expert advice rather some notes to increase peoples knowledge on the building process. I hope you find it of use.
Before you start looking for an Architect to engage there are a number of things you can do to both make the process easier and help in the interview process to work out if an Architect is a good fit for you.
1. Budget. You need to know what you want to spend and what you can afford to spend. Some clients only want to spend $500k but can actually afford $700k. There is no point in playing games with your Architect and low balling your budget to them, a professional and responsible Architect will work to your budget. It is a waste of both of your time if you tell them your budget is $500k and they spend time trying to get $700k worth of requirements to fit into a $500k build and then you reveal that your actual budget was $700k. Most clients want more than they can afford so you might as well be up front about what the real budget is. There is nothing worse for a project than a client slowly extending the budget all the way through construction and ending up with dozens of changes and variations which inevitably invite problems with the end result and the timeline.
2. What do you like? Unless there is a particular project of an prospective Architect that you love and you want the same style and aesthetic it helps if you can show or express what you do and don't like. Websites like Houzz are great for setting up idea books that you can fill with photos of rooms and features that you like that you can then share with your Architect. This cuts out a lot of the guesswork as to what you the client like and the standard of finish you are expecting.
3. Size Versus Quality The vast majority of us aren't in a position to afford our dream house. The two main things that effect budget are size and quality. As a client it helps to know upfront whether you will be willing to reduce the size and or the quality if your budget can't fit your requirements.
4. Research After doing your ideas research online or in publications as to what you like it is worthwhile to spend some time looking through kitchen, bathroom and furniture showrooms so you can get a feel for the price of the materials and fittings you like so you can understand what say a $200m² tile looks like compared to a $40m² tile. Kitchens and bathrooms are the most expensive per m² in the construction of a house so your selection of materials, fixtures and appliances in these can dramatically effect the cost of construction. Kitchen appliances are often a sticking point in design as the client doesn't know what they want in terms of function or size. It helps to know if you want induction or gas, single or side by side fridge, pull out or fixed rangehood, do you like the idea of your cooktop in your island bench or does the look of the rangehood hanging down from the ceiling offend you. There are no right or wrong answers to these questions they are a matter of preference and the more research you do the more confidence you'll have in your preferences. Many large appliance retailers have free cooking classes on weekends so you can actually try out different appliances and see what you like and what you find value it. Steam ovens are great, they are very expensive and if you don't ever use the steam function you would probably be better off spending the additional money on something else you would use.
5. Feasibility It is not the Architects role to work out or guarantee that the project is financially feasible in regards to return on investment. If you are considering the sale of a project or part of it and profitability effects your decisions you as the client need to do your due diligence as to the feasibility. It can be disastrous to leave figuring this out to later in the project. If you want to build two town houses and sell one to offset the construction cost we highly recommend you work out your feasibility and requirements before seeking the services of an Architect.
Engaging and Architect is a long term relationship as it can take 2 years from start to finish to complete a house. While an Architect's design skills are what attract many people to a particular Architectural firm at the end of the day they are going to be responsible for managing a massive amount of your money. We have always seen our client relationships about trust, respect, honestly and doing what you say you will do both on our end and the clients. We have turned down projects where it was obvious that we couldn't trust the client and that they wouldn't do what they said they would do, primarily pay their accounts.
A well designed completed house doesn't necessarily make for happy clients. Architectural history books are littered with great houses that have stories of huge frustration or dissatisfaction of clients behind them. The same principal applies to selecting a builder, but more on that later.
May of our clients come to us after having been dismayed at the services of other designers. Their main frustration is not being listened to and this being reflected in the designer designing what they think would work best rather than what the client asked for. With that said we will always question a clients requirement or idea if we think that there is a better solution, however if the client listens to our suggestion and still wants to proceed with their idea we then we move on and implement what the client has asked for.
You could compare going to an Architect like going to the doctor. You don't go to the doctor and tell them what the diagnosis is and then prescribe your own medication. If you don't want to work with a professional and experienced Architect and respect their skills and instead just want to dictate the project to them you would be better saving your money and going to a drafting service.
The roll of the Architect as a designer is to listen to a clients requirements and then propose a design solution. The main skill of an Architect in design is a puzzle and problem solver putting all of the pieces (requirements) together into a cohesive solution. Often we investigate requirements with clients to see whether there are spaces that either aren't required or can be combined in other spaces. If we can combine functional spaces we can reduce the footprint of the building allowing for more budget to be allocated to high quality fixtures and fittings or features such as larger windows.
Once the project has completed design and construction documentation the Architect moves into the role of Contract Administrator. This is a shift contractually as during construction the Architect sits in between the client for communication and contractual decisions. Clients can find this confusing as they are paying the Architect during this phase but the Architect as the administrator of the contract we are required to be impartial. As an example the builder hits rock during excavation that was not found in the geotechical survey and is therefore a latent condition, the clients first reaction is "not my problem I signed a contract the builder should have allowed for this". As the administrator we will review the builders claim for additional money to cover the removal of rock and if it is fair and reasonable we would approve the variation even though the client doesn't want to have to pay for it as contractually the rock was an unknown latent condition and the client needs to pay for it. On the flip side if the builder claims a variation for rock removal as a latent condition and we have reviewed the geotechnical report and it clearly identifies the rock being there we would deny his claim.
The Architect does not manage the builder. The Architect's role during construction is to inspect the works for quality and correctness, review their payment claims and answer their queries. The Architect does not control the builder, if the builder doesn't show up to site for a week for an unknown reason the Architect will query their construction program and ask them to show how they are going to make up the time. The Architect is not in the position to order the builder to come to site and continue construction. Delays happen where trades have run late on another project and can attend site when they were booked in and their work is on the critical path of the timeline they will delay the whole project. If they delay the completion date of the project the clients costs in the delay are covered by liquidated damages.
Architects aren't mind readers and our fees don't cover designing 15 different options until we get to something you like. Unless we have completed a project you have seen and you love everything about it we will need your input as to what you do and don't like as well as what you need. We need to know the budget, type and number of rooms you want at a minimum. As mentioned above sharing idea books from the Houzz website can aid us greatly in understanding what you would like in each area of your house.
Most Architects fees are based on a % of the construction budget. Our fees for residential work are typically about 10% for a new dwelling up to about $2m. Renovation or extension projects are typically about 12% percent as they are more intensive. Multi residential is typically 7.5% due to the repetition of many elements. Requirements for town planning approvals due to heritage listings or multi residential may incur additional fees. Make sure you keep in mind that it is a % of the final build cost so if you start with a budget of $500k and decide to extent it to $700k the Architects final fees are a percentage of $700k. Below is a typical fee scale for a residential project.
Our fees are based on the construction budget (ex. GST). The construction budget is the amount that you will pay the builder (ex. GST). This is what our fees are based on, so if your budget for your house is say $1m it would make your construction budget $909k + GST. If our fee was quoted at 10% of the construction budget it would be $90k + GST.
Many clients have misguided assumptions of what projects will cost. This is often due to anecdotal evidence from other projects they have seen or off hand comments from contractors who may say things like "that cost $1m to build". That may have been the contract price but doesn't include GST, fees or charges. Clients then assume that if they set a project budget of $1m that they will be able to get a project of the same size and quality. The issue is that the construction budget may have been $1m however the project budget is very different as the project budget = construction budget + GST + contingency + all associated fees.
The architect is responsible for managing the construction budget, the client is responsible for accounting for the difference between the construction budget and the project budget.
At the commencement of projects we provide our clients a breakdown that shows the difference between the project budget and the construction budget.
Projects require contingency to cover unknown issues and additional costs that come to light during construction. This means in the above example we would design to a budget of $697k so there is a contingency of $77k to cover unknown costs. In this example we would be aiming for the client to sign a construction contract with a builder at $697k + GST so there was an allowance of 10% or $77k to cover variations during construction.
Typically the biggest area of contention in residential projects is the construction budget not being met. In our experience most clients don't have the budget to get what they really want. Sort of like buying a car, every one dreams of getting the fully optioned luxury model but in reality you can only afford the base model or you have to decide to get the smaller model if you want the luxury specification with all the options.
Typically the two items that control the cost of construction are size and quality. If you have a constrained budget that won't meet getting the size you want and the quality one of them has to be reduced to meet the budget.
On occasion we have been forced to write to the client and explain that if they aren't going to accept costing advice we can only continue if the client accepts responsibility for whatever the tender price comes in at. We had a client go out on a whim and spend $20k at a furniture sale out of $280k they had to spend on the whole project and there was no budget allocation for any furniture at all. They were of the opinion that they would just negotiate the builder down? Another example was a client who had a budget of $300k to renovate their house and the initial budget I did based on their requirements came out to $360k. The client just put lines through my prices and wrote numbers 20% less next to them and sent the budget back saying they had solved the budget issue. At this point we had to say to the client either they reduced the project scope by 20% or we couldn't take responsibility for the project.
The biggest risk we encounter on extension projects is the existing house. Clients often start their briefing by saying "we don't need to do anything to the existing house that isn't being touched".
Often the house may look fine but you may need to:
While the existing house may look fine to the client when the new section of the house is close to complete it starts to highlight how worn or tatty some parts of the house are in comparison to the new extension. This can result in clients then increasing the scope to cover.
Doing the above helps create a cohesive finished house that has a consistent level of finish throughout, however these items above can easily add $100 - $200k to a project.
We typically discuss the above items with clients and explain that if their brief is not to touch the existing house it means just that and there won't be an allowance in the budget to complete any of these items.
We understand that clients increase scope in renovations as they begin to see the project take shape. However clients need to be aware that these costs can get away from you as once one part of the existing house is improved it often has a flow on effect. If you repaint an old house, it becomes vehemently obvious that the gutters need replacement, along with the pointing and then the roof needs cleaning. Once that is done the front fence looks particularly shabby and needs to be replaced. Before you know it you have spent $40k that wasn't in your original budget plus another $4k in Architectural fees.
Most clients get the money for their building projects as a loan from the bank. If you haven't built before you need to get clear guidance from the bank as to how you will pay for the building work and the consultants fees. We have had situations where we have designed and documented a house and the clients haven't paid their invoices for a couple of months and then the client has to apologise as it turns out the bank won't release any funds until a construction contract is signed with the builder.
It is imperative to be clear with your bank how they release funds and for what. You may find that you need to have the cash money to pay for all the consultants fees up until you sign a building contract at which point the bank will then release the money for the fees to reimburse you. We have encountered instances where the bank won't release construction monies until the basement is completed, the basement in this instance was $300k and the client had to pay for this themselves and then the bank released the $300k to them once the basement was completed.
As the client you need to remember that you are responsible for paying the Architects and the consultants. Your financing arrangements aren't the responsibility of the Architects or the builder. The last thing you want during your project is for the Architects or builders to stop work on your project due to not being paid and then you are in a stalemate with the bank who won't release funds unless the consultants or builder continue without payment until a stage where the bank will release funds.
Make sure when you are organising finance for your project that you have the funds to cover the Project Budget not just the Construction budget. We had a client that had only organised enough finance for the construction and not the fees which created a panic during construction.
A client of ours who had done a number of renovation project said that they always organised 30% more finance than they required to make sure no matter what transpired during the project they didn't have to worry about whether they could pay for it. This wasn't for the project going over budget, instead to cover additional works they decided to do during the project.
Base Architectural fees don't cover interior design however we do offer it as an additional service. Clients often engage their own interior designers to help them select all their finishes, fixtures and fittings which can deliver and excellent finished result.........however.
We have had some very average experiences where clients have engaged their own interior designer. The things we have learnt are the following.
If you don't engage your Architect to do interior design or engage a third party interior designer you as the client will be responsible for the selection, payment and installation of furniture and window coverings and they won't be in the construction budget instead they are in the project budget.
Good quality furniture and curtains are very expensive. Often clients will start their project having decided that they will just retain all of their existing furniture. However much like the existing house their 15 year old furniture looks shabby and out of date in their new extension.
Unfortunately Architects and builders understand drawings but clients often struggle to understand the detail as they have no experience in reading them. To some people it is like being handed a contract in a language they don't understand. We highly recommend that you book a meeting with your Architect to go through the whole drawing set page by page, drawing by drawing so you can ask questions and the Architects can explain everything that is proposed.
During the design process clients often spend little time reviewing drawings they are sent above a cursory look over to check that rooms are where they wanted them. Given the amount you are paying in fees let alone construction we highly recommend that you spend a great deal of time going over the drawings and come back to the Architect with a list of questions on anything you unsure about or don't understand. As we are in a digital world nowadays Architects typically send PDF's to clients, if you don't have access to at least an A3 colour printer it is worthwhile asking your Architect for a full scale print out of the drawings at major stages for you to review which will reduce the risk of you missing details in the drawings.
We provide our clients with 3D walk through files all the way through the design stage so they can walk through their house like in a computer game. Clients engage much better with 3D models than drawings. We also have Virtual Reality Occulus Rift goggles so clients can walk around spaces during our design meetings in Virtual Reality.
When you sign off on the tender drawings you are committing to pay to build whatever is contained in them so being confident that you understand everything that you area having built is a good way to start construction.
It is surprising and concerning sometimes when in the middle of construction a client will make a comment like "I thought we were having a door there" and you as the Architect know that a door was never proposed there and never shown in the multiple sets of drawings supplied to the client over the past year.
Often clients want to buy fittings or fixtures themselves to save on builders margin. This can work well but often clients don't disclose what they have spent on buying items and then panic when they add what they have spent on to the construction budget. This usually occurs because clients go to look at appliance and bathroom showrooms and select what they would really like rather than what has been allowed in the budget.
To avoid this work with your architect to set a budget on what you are going to spend and be willing to increase the project if you decide to spend more than budgeted. We have had examples of clients spending $80k on kitchen appliances when the project budget initially allowed for $12k, in that case it was fine as they were happy to increase their project budget. But we have encountered other instances where there was a budget of $12k for tap ware on the project and the client ordered $40k worth of taps and then expected the us to find $28k of savings elsewhere in the house without reducing the size of the house.
Tiling is expensive and clients often want to try and save money by going and buying tiles on sale themselves. This can save money but it can also be risky if they can't be delivered on time or if they are seconds and the tiler has to throw out a large percentage of them as defective.
Clients often run into trouble when buying appliances as they go shopping and will often find a bargain on sale and buy on the spot. They are then responsible for the storage of these appliances and making sure they are delivered to site on time. The bigger risk is often they buy items that are a bargain but aren't actually the size designed and documented by the architect so when they are delivered to site they don't fit or the plumbing fixings are in the wrong place.
Many clients have friends or family members who are in the construction industry and they rely upon them to get items or services cheaper. While this can save money on paper be weary of the actual cost. One example would be a client who's family friend was an engineer who offered to do the structural and civil engineering design and documentation for free. This issue arose that the friend would do the work when they had some free time which resulted in drawings taking months to get which would typically take a fortnight which delayed the project by months. So saving $3k on engineering cost the project months in delayed construction.
Another example is where a client knew a kitchen designer and fabricator who offered to design manufacture and install their kitchen. They wanted it done outside the building contract to save the 15% builders margin. The issue was then the kitchen installer didn't answer to the builder and the builder had no contractual control over the kitchen installer. The risk is if the kitchen doesn't fit or the electrical and plumbing services are not in the required location the client will be responsible to pay one of the parties to correct it. The other risk is while we had designed the initial layout of the kitchen the client then went through the detailed design process with the kitchen supplier and we had to trust that the completed kitchen would fit in the space we had designed and documented.
Years ago I had a initial interview with a client who gave me a brief on what they wanted, a larger than modest house. I did the numbers and worked out that it was going to cost at least $700k the potential clients response was "I'll build it for $360k, my brother imports tiles that I'll get for free and my cousins a plasterer". I had to decline the project because it was never going to happen and they were only ever going to want to pay fees based on $360k not the $700k it was going to cost. The moral to this story is getting mates rates on materials or services is great but they aren't free and usually only save you their profit margin. On the overall project they may save you 2% - 5% not 50%.
The Architect will produce budget estimates on the initial design through to tendering the project to builders. In cases where we are asked to design something that only just barely fits the maximum budget the client can afford (as compared to "wants to spend") we highly recommend that a third party cost planner is engaged to provide a costing report to validate our cost plan.
Some clients will want to continue through construction documentation to tender even though our budget estimates show that the project doesn't meet their budget. We only ever agree to do this if there is a contingency plan that would bring the project back on budget. For example one of our clients asked us to design a project that clearly couldn't meet the budget, upon this advice they asked to proceed with it under the agreement that they were willing to cut out the pool and or garage if the quotes from builders came in over budget.
There have been cases where we have worked through a project and the tender prices have come in over budget unexpectedly. It is then our responsibility to rework the design and drawings to get the builders price to meet the clients budget at no cost to the client. However if the client decides to increase their budget to get what they wanted the Architects fees increase proportionally. As an example if the initial design budget is $500k and you are advised during the design process that to meet your requirements the budget will need to increase to $700k and you agree to the budget increase the architects fee will increase from $40k to $70k + GST. In the instance that the project goes to tender and you accept a builders quote of $750k rather than having the architect reduce the project to meet the $700k budget the architects fees would increase to $75k + GST.
Clients often have think that clients make huge profits on jobs as they get paid around 10% of the construction budget. In reality they generally make a lot less than the builder. Clients often assume that paying $200k in fees to deliver a $2m house that the architect makes a massive profit on that. The reality is that we often spend over 1500 hours from start to finish on a house with our staff being skilled professionals using very expensive equipment and software.
A number of consultants are required to complete construction projects. They are contracted and paid by the client and are coordinated by the Architects. The following is a list of consultants typically involved in a project like this.
Typically clients don't have a preferred builder unless they or a close friend has used one before. If you have a preferred builder that you trust we highly recommend engaging them at the design phase with an open book approach where the builder sets a percentage margin and from there shows the Architect and client all the quotes and estimates that come in. The advantage is getting a builders input into the construction methods as well as being able to build up a very accurate costing early on it the project which reduces the risk of budget overruns.
If the project goes to tender typically the Architects will nominate 3 builders who are of a size and quality suitable for the project. We recommend that the clients meet the builders before the tender is issued to get a feel for the builder as well as to get to see some of their completed projects. We recommend so select a builder by their personal fit, there previous work and their references rather than on price alone. The construction process can typically last a year and like with the Architect you want to make sure you get along with people you are paying to deliver your project.
Sometimes clients will nominate one of the three builders based on a recommendation or previous relationship. Unfortunately sometimes the builder the client nominates isn't of the same calibre, size or financial soundness. Clients understandably are always attracted to the lowest of the 3 prices that come in from the tender. As a rule of thumb if one builder quotes $500k another $480k and the other $400k it is unlikely that the builder who quoted $400k will be able to complete the project to the standard required or financially complete it at all. If the project is well documented and specified there should be about a 5% variation in tender prices, a builder that quotes well under may have missed elements and details or has merely estimated some trades rather than getting them quoted.
Your Architect should advise you against accepting the lowest price if they have doubts that the builder has priced it correctly or will complete the project successfully. However at the end of the day it is the clients decision and unfortunately the potential saving of money can cloud the clients judgement in the actual value of this. While in signing the contract the builder is committing to build what has been documented and specified they will eventually work out what they have missed and or under quoted. Typically the builder will try arguing that elements weren't included in their price or why they should get an increase in budget, this can bring a lot of strain to the project and can cause financing issues if the client has only budgeted on the lowest price. Generally if the project has been costed and budgeted at $500k you will end up paying $500k either through builders variations to their tender price bringing it up to $500k or in the worst case scenario the builder cannot afford to complete the project and walks away which leaves the client with an unfinished project. Finding another builder to complete a half finished project comes at a large cost in both time and money.
Another scenario we see regularly is the builder suggesting to the client that they could save them a lot of money if they let them specify the fixtures, fittings and finishes to something "similar" to what the Architect has specified or the client has chosen. The issue is if you sign off on this approach it often results in the old saying "you get what you get and you don't get upset", if you get to save $50k in finishes and fittings by the builder selecting their "trade selection" there will most likely be a reduction in quality.
Simply, in our opinion no. Around 30% of the Architects fees are for running the tender and administrating the contract during construction. Architects typically don't make much if any profit out of contract administration as it is long and intensive.
There are couple of reasons that the Architect is involved during construction
In the fee table example above it shows that around their are about $32k in Architectural fees payable during tender and construction. Over the course of a year this equates to about 4 hours a week for 52 weeks of an Architects time.
The scenario that I typically give clients is. If it takes an experienced and registered Architect 4 hours a week to administrate your project it will probably take a home owner with no experience at least 8 hours a week. So if you work for a living, do you have 8 hours a week spare during business hours to take phone calls from the builder, answer emails and do research on construction questions of which you have no experience.
The client usually lacks the time, experience and knowledge to be able to answer all the builders questions and evaluate their variation claims. This opens the clients to the risk of being taken advantage of financially and it doesn't take much to go over the $32k that the Architect would have charged.
Typically clients who want to manage their own projects are small to medium business owners as they have more time flexibility. My advice to them is generally, if you are good at what you do and it makes the money to pay for this project how would your business be effected if you spend a day of your week stressing over dealing with a construction project which you have no experience in. Monetarily I ask them if they put 50 days of their year into business development or working in their business would they generate in excess of $32k, if so why would you want to manage a construction contract. Contract administration is a lot of work and the majority of it isn't fun, Architects would prefer to being design work but we do it because it gives the best chance for a project being delivered as intended, successfully, on time and on budget to a happy client.
Simply put liquidated damages are an amount of money the builder pays the client for each day that they are late on finishing the building project. When you sign the contract with the builder there is completion date or working days stated in there. During construction the builder can claim time extensions for issues that are beyond their control such as rain days or delayed supply of materials.
Clients often think that liquidated damages are to be used to punish the builder or fine them into hurrying up and completing the project. This is not the case, liquidated damages are to cover the clients costs of the project being delivered late. For example if you are renting a house to live in during construction of your extension at say $800 per week and your construction project is delivered 10 weeks late it would be reasonable to set the liquidated damages at $800 per week that the project is late. If it was a $2m house you were building and your mortgage was $1800 per week upon completion it would not be reasonable to set the liquidated damages at $1800 per week as you would be paying that money anyway if the project was completed on time.
Most building contracts allow for the liquidated damages to be set at tender time. Some clients will want to go against our advice and set liquidated damages at many times what it would actually cost them financially for it to be delivered late. The issue with this is you will typically get a higher tender price as the builder will want to cover their risk. The other issue is the clients risk losing if the builder took them to court over liquidated damages as there is evidence that the courts will only award the client the actual out of pocket expenses.
Below are some rules of thumb for a stand alone house or extension of a medium level of Architectural finish. Double the rates if you want high end residential.
Building Permit Documentation
Tender Phase / Construction / Post Construction