Money for nothing.....

[shmoolikipod]

I was wondering if you will know what I am talking about:

Down here it is somewhat common to take a costumer to any service provider, say a flooring store or a contractor. And then, expecting to recieve a percentage of the deal as a "commision" or call it what you will...

Is it common out there? the concept which "if I provided you with a paying costumer, you will spare 5% of the deal for me"?

Rumor says that it is common in the US, and excepted as a norm, am I right?

[jparchitectus]

I have never received a commision for doing a service like that. I think that is against the proper business etiquette and I do not think that is allowed. That is almost like a payoff.

On the other hand - If I go to a tile showroom and spec 10,000.00 of tile we are entitled to 15% (the normal architect percentage) of that figure. It falls within the cost of construction of a project. Thus - It is not an extra bill or fee, it is a fee that will be reflected in the builders monthly billing - or the overall project cost in which an architect bills against.

In the same theory if you work to save your client money, you are in fact working harder to reduce your overall fee.

[Brian T]

In the states that is generally referred to as a "kick-back" and is viewed by many as walking the ethical line. I wouldn't say it's common here at all.

[shmoolikipod]

On the other hand - If I go to a tile showroom and spec 10,000.00 of tile we are entitled to 15% (the normal architect percentage) of that figure. It falls within the cost of construction of a project. Thus - It is not an extra bill or fee, it is a fee that will be reflected in the builders monthly billing - or the overall project cost in which an architect bills against.


If I understand correctly, you recieve 15% of the overall budget as an architect's fee?

[ewagner]

In the same theory if you work to save your client money, you are in fact working harder to reduce your overall fee.

This is the reason we only work on an hourly rate and not by percentage of construction. If our fees were based on a percentage of the construction cost, there'd be no incentive for us to find more economical ways of achieving the end result.

[digdoi]

Something like this is happening here with the interior architecture market. It's growing a lot recently (70% from last year) and the interior related stores (furniture, lighting, accessories) are creating associations for architects and interior designers. Once you associate, for every client you take to one of the stores you receive 5 to 10% of the amount spended by the client and a "score" (something like rep points...:D ), that in the end of the year can be converted in prizes.

[WilsonMetry]

Nope, cash from the supplier to the designer does not happen in the States. Too much opportunity for deception, corruption and dishonesty.

Example: I'm a client and I want a particular type of stone for my bathroom. Several places carry it and not all are the same price but the most expensive place gives the designer a 10% kick-back (see above for definition). The designer says we must get the stone from this supplier because....(pick your own reason). Now, as the client, I'm paying more than I should and its the designers fault.

So you can see, the incentive for the designer to make a few extra bucks makes him/her suspect. I think it is a bad idea overall and not good for anyone in the end. Especially not good for the architecture profession.

[shmoolikipod]

Now, as the client, I'm paying more than I should and its the designers fault.


What if I took the client to a reasonable priced place, and get him a discount on top. And then, the store gives a kick back?

Everybody is happy including the client, and they live happily in their new house ever after.....

[WilsonMetry]

What if I took the client to a reasonable priced place, and get him a discount on top. And then, the store gives a kick back?

Everybody is happy including the client, and they live happily in their new house ever after.....

I think that you could cite examples where it might work for everyone but I think there is more potential for harm than good. I dont like the idea of putting the profession in situations for so much conflict of interest.

As the designer, am I more motivated to make a few extra bucks or give the client the lowest and best cost, and not have any conflicts? Its a situation that ultimately will harm the profession.

[flino]

Iin Peru is the same situation....I always passed the "commission" to the client, and it was much better because the client was very happy that I safe his money and he recommend me with more people then I got more clients and more money :)….after all…it's more important that your client introduce you with another people as "this is my architect" …it has more value than this 10%.

[wizum]

some good points...

I question our interiors people all the time because we have reps coming in non-stop giving them stuff... free food, tickets to concerts and sporting events, you name it... It borders on the line and many times crosses it... We comprimise ourselves when this happens because we are making choices based on pay-backs rather than what is the best for a particular job or client... and flino... great point...

[spadestick]

it happens all throughout Asia, very common thing.. "you scratch my back I'll scratch yours", it's no wonder why some companies are always recommending certain contractors and types of materials in Asia. In Asia, only 3-5% of firms practice real design. The rest just copy, pimp and churn out the same old, same old, or just do for the sake of $$.

[jparchitectus]

This is the reason we only work on an hourly rate and not by percentage of construction. If our fees were based on a percentage of the construction cost, there'd be no incentive for us to find more economical ways of achieving the end result.


To argue that...How can you really charge a client say 100.00 for an hour in which you make decisions with 30 years of experience + the decisions value 50,000.00 (actual money figure - say appliances and plumbing fixtures). Is that fair?

[Pedro Barradas]

Very common around here, not ethical at all, and against Architects Order deonthology proccedures... I always "give" the discount to the client...

[jparchitectus]

If I understand correctly, you recieve 15% of the overall budget as an architect's fee? Generally in my area architects get 15% fee based on the total cost of construction - If you spend 1,000,000 they get 150,000.00

[ewagner]

To argue that...How can you really charge a client say 100.00 for an hour in which you make decisions with 30 years of experience + the decisions value 50,000.00 (actual money figure - say appliances and plumbing fixtures). Is that fair?

Not really following what you're trying to say...can you explan your viewpoint differently?

[primocordara]

I generaly charge a percentage (arround 10%) of the cost of construction.
I might alternatively charge the hour of assesment, if this does not lead to construction, for example evaluating properties, etc.
The "decorators" are specialists on geting an extra income, 10 or 15% from the supliers... i consider it immoral, sice the client relies on us to check for the costs of construciton! I am already charging them on the cost of it, so it is my responsibility to get the best price for them, and geting them a 15% discount is great for them apreciating my services.
I once won 2 tickets to NY from a kitchen suplier, they randomly draw names from the architects that worked with them during the year.. :rock on:

[jbender]

a true 'kick-back' is one that i never came across here in the states, but when i think of it, a lot of us get 'perks' that we might not think twice about... there are many suppliers and manufacturer's who will offer first class trips to their factories for "tours" - short factory trip followed by golf, wine, great meals, and plush accommodations. it's not a monetary gift, so it doesn't bear the hallmarks of graft, but it is sure done with the intent to influence, perhaps unduly. :eek:

the principals of a firm i used to work for were pros at working potential suppliers and contractors for the large airport and courthouse projects we were working on for free trips to see the quarry for the marble in italy, or the factory for the seating in england, or the 'design center' for the carpeting manufacturer (with attached golf course) in georgia - all first class, all on the suppliers' dime. :puke:

i myself got a first class trip to a cool midwestern city to the design center of the ceiling manufacturer we were thinking of using. this may be a bit of post rationalization, but at the time the clg system was in prototype stage and it was being made custom to our specs and details. we got to go see the mock-ups as well as spend some cool museum and other schmooze time... therefore, for me the trip kind of passed the 'stink' test.:rolleyes:

[primocordara]

well, i don't think an architect would spec influenced by the posibility of a prize, or by an invitation to visit the factory...

[franjayo]

Most developers in large projects are aware of this issue and they rather make the large purchase decisions themselves by just bringing the architect the alternatives they have already negotiated.

However, the interior design industry works this way openly, and many let the customer know that their only payment will come from this commission. I designed a bank interior years ago. The customer later asked us to pick and manage the installation the interior modular system. We charged them for the construction plans and design, we told them we would just get half the commission from the furniture and give them half as discount. We still made more money and it was a whole lot easier to do the furniture part.

Architecture is hard and pays badly, we are too hard on ourselves.

[arv]

Generally in my area architects get 15% fee based on the total cost of construction - If you spend 1,000,000 they get 150,000.00
JP it is ok to get 15% fees from the client , even 25% , nothing unethical , just an agreement between two parties . When you go with a client to select tiles and the store offers you 15% , it is absolutely unethical . How are you supposed to safeguard the interests of your client when you are getting money to look the other way :confused: . That said , it is quite common here for the building contractor to offer you a cut as well . Very very unethical .

[nicholas]

In Asia kickbacks are standard practice; charge a low upfront fee and get more from behind backs and around corners...

Difficult when clients compare fees- and trying to explain that you do not take kickbacks

[tdmc]

We have a Code of Conduct - sets the responsibilities of an Arch (mind you not everyone abides by it) but in theory - and as a good "moral guide" the Arch is engaged by the client to effectively look after the client's interests (there are some other obligations - like, to the community etc but essentially the Arch is a professional who has an obligation to is firstly to the Client (in the sense of this thread).
ARV get's it right, how can an independant professional safeguard the interests of a client when there is another form of incentive offered.
Interiors people, in my experience, tend to work differently and here commissions/discounts etc happen with that profession.
I tend to keep the roles clear - I am engaged by and therefore have the interests of my client, first and foremost.

I mix % fees, hourly rates and fixed fees, depending on the project.

[nicolas]

"Architect, with the purchase of this tile floor you'll receive a 5% discount. Now, you decide if it's a real discount or if you keep it for yourself"

Common practice in Peru. Completely inmoral if you decide wrong...

[Juan Gomez-Velez]

Architecture is hard and pays badly, we are too hard on ourselves.


Jayo, I must agree, we certainly are!

Saludos

Juan