Is your real estate agent worth more than your architect?

by | Feb 9, 2021 | What trends we’re seeing

Controversial I know –

To all my friends in real estate, this is not aimed at you – good on you for getting paid well for what you do. This is an issue for my own profession & those that engage our services.

Very rarely is the agents commission, fancy suit or flashy car questioned – in fact, that’s what we expect. But every architecture student gets told “if you want to make money, don’t become an architect”.

Lawyers are taught how to spend 7 minutes on a 4 minute phone call, so that they can charge for 12 minutes and then still have 5 minutes spare to add to someone else’s bill. Unlike lawyers, architects don’t generally charge by the hour. Every architecture student is told that “the design is the most important thing. It doesn’t matter how long it takes.”

Let’s work through a simplified example, with maths that even an architect can understand.

In Sydney, the average real estate commission is around 2%. For the sake of keeping the maths simple, let’s assume the architect can also attract a fee of 2%. Sounds equal so far – except that the agent gets paid on Sale Value, and the architect gets paid on Construction cost.

Assuming an apartment building had a construction cost of $15million and a sale value of $30million. The agent therefore gets paid $600,000 to sell all the apartments in the building. The architect gets paid $300,000 to design and document the building.

Why is this so? I would like to suggest 3 reasons.

  1. perception of value (creating vs realising),
  2. real cost (pay up front vs at the end)
  3. lack of appreciation for the work and skill required (we don’t do much)

After 5 years at university, I had nothing to my name. My high school friend did a 3 year carpentry apprenticeship and had already bought his first home by the time I finished studying. When I bought my first home, he had already paid off his waterfront home.

The agent’s services lead to a large sum of money appearing in our bank account. The carpenter’s efforts lead to a building appearing before our eyes. The architect takes a long time to give us a few sheets of paper (nowadays they don’t even give us the paper, just a pdf file). A few drawings on a page appear to have little value when compared to a completed building and a good return on investment.

But without the plan, the building couldn’t be built, and the building couldn’t be sold. Is the plan not the most valuable thing in the entire process? The plans are the creative genius that unlocks the cash at the end of the process. A good plan, a good builder and a good agent will deliver a superior return.

Architect & agent – both are important. Architects should be paid properly for their time, liability, responsibility, and for the creation of something valuable out of nothing.

- Peter Couvaras
Peter started the Couvaras Architects from the dining table in 2005, and has built a reputation for delivering buildings that not only function well, but deliver an element of delight. He is responsible for client engagement and managing the team.
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