Whether design is in-house or subcontracted, most companies require homeowners to sign a separate design contract. Mike Holmes usually charges for design at an hourly rate, but has a flat rate for certain kinds of projects. "Once we're done designing, we can build the project or if they would rather bid it out, they own the drawings," Holmes says.
Ron Cowgill has a design/build contract that stipulates an hourly rate for his design work, as well as fees for the architect and draftsperson. He marks up the architect's fees by 50%, which meets the going rate in his area. He's able to do this because the architect he works with now charges him less. He was charging a 30% markup with another architect. "This is a unique situation that I'm able to mark up this much and still be competitive," he says.
Richard Rudisill marks up architect's fees 10% to 20%, which he says is the going rate in his area.
When a project comes in partially designed, Roger Friedell usually charges an hourly rate. But he's trying to avoid those situations to aim toward full design services with a flat fee. "Our intent is to give clients the freedom to ask questions without wondering if we're charging them every time they pick up the phone," Friedell says. His firm's architect, Mark Gunstad, copyrights the drawings. If a client decides to have someone else handle construction, Gunstad would have to draft an agreement to give them permission. "Our drawings are hard for someone to bid on and give similar pricing because there is detailed work that is not documented," Gunstad says.
Even after merging with builder Peter Pagenstecher, Dean Brenneman uses a contract similar to the one he used as an independent architect. He did, however, delete the charge for 5% of the estimated cost of construction that covered taking the project through the bidding process and overseeing the project for the homeowner, because that service is now included in the firm's design/build process