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Compensation Schedule for New Residential Design, 2 home/lot, 10 home/lot, 80 home/lot contracts

Compensation Schedule for New Residential Design, 2 home/lot, 10 home/lot, 80 home/lot contracts

Compensation Schedule for New Residential Design, 2 home/lot, 10 home/lot, 80 home/lot contracts

(OP)
Good day ladies and gents, would love to pick your brains on the business end. I'm looking for some suggestions on pricing schedule advice from any disciplines with regards to a residential proposal I'm preparing for residential custom home structural design/detailing. I just had my client ask for me to revise my proposal from 2 different custom homes to include pricing for 80 homes/lots instead of just the first two 2 homes he plans to build. Not complaining about my dilemma, of course, but could use some help in defining a fee schedule for very similar custom (not completely track) home designs and respective re-use and placement on a number of different lots.

My first thought would be to avoid the dangling carrot trap and to request full design fee compensation for the first few projects designs of each plan and then a continue a reduced fee for say each group of 10 to 20 consequential homes to be permitted to be paid up front or at a very decent retainer. This as opposed to proposing any reduced price fee for the first 5 to 10 homes until a decent relationship was developed which I would assume benefit both parties.

Possible Schedule
Homes 1-5 100% of design fee, no reduce fee schedule
Similar Homes 5-10 85% of full design fee of first retainer of 50% to start
Similar Homes 10-30 75% of full design fee " "
Similar Homes 30-50 70% of full design fee " "
Similar Homes 50-70 65% of full design fee " "
Similar Homes 70-80 60% of full design fee " "

Simply don't want to start with a reduced price out of the gate based upon the promised assumed continued relationship throughout the design and build of 80+ homes.

Any thoughts? Similar experience with developers or contracts?

Thanks in advance for your thoughts.

RE: Compensation Schedule for New Residential Design, 2 home/lot, 10 home/lot, 80 home/lot contracts

Give him a flat rate to do the "master models" which would be the original design for each model he plans to build. Then give him a "repeat fee" for each model that you have already designed without any changes. Next would be a variable fee that would cover all the customization. You definitely want to cover your arse on the customization as builders will say yes to anything a homeowner asks for if they will sign on the dotted line. If the builder is a semi-custom builder then they should have some models they use with a bunch of different options that you can design for on the front end but you just want to make sure you dont leave too much on the table if it all ends up being custom.

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