Pay Referral Fee to Architect as a General Contractor???

Question

Hello BP! first time poster here. Has any Builder/GC here ever payed a "referral fee" to an architect for bringing you a custom home project? My company has been doing residential Spec builds in Austin for the past 6 years or so and recently got into doing Custom builds, an architect we have worked with in the past approached us and basically he wants us to build a house he's already designed for his clients, (we are still in the process of meeting with them and doing estimates etc.), we verbally agreed on a 20% GC fee over construction costs, but I have a feeling he will want to split this 20% fee with us somehow as he tried to do something similar a few years ago in a project that didnt end up happening (he wanted to split the 20% in half between us) which we didnt think that agreement was fair at the time. I would not be opposed to give him a reasonable "finder's/referral fee" for bringing us business and introducing us to these clients, but I've never done something like this before so is there a reasonable number that people have done before? Or is this a no-go in the first place?

Matthew Sprott · Answer

Hey Guido,

I'm an architect here in Spokane, WA and I've never had a referral fee for recommending a builder for a project. I'd be curious if there are other architects out there charging for that and how that would be contracted. The owner should be contracted with the architect to design the building and should separately be contracting with the builder to construct the house. How the owner finds a builder is up to them, however, architects might recommend builders they have a good history with and vice-versa. I wonder if there is some miscommunication here and the architect you are referring to is actually talking about charging for some construction administration services?