Fees for custom residence

I'm looking at having a custom contemporary home designed and built in Santa Barbara, CA, where construction costs for this type of work are purportedly at ~ $500/sq ft. (High-end is substantially more than that.) I'm targeting ~ 4500 sq ft for the main house at ~ 1000 sq ft for garage/utility. So I'm facing construction cost of ~ $2.55 million. The lot is flat and clear.
The initial quote from my favored firm for architectural fees was 15%, just shy of $400K, inclusive of engineering. When my eyes popped out of my head, this went down to 12%, exclusive of engineering, still well over $300K.(These include CM.)
The same house built in Anytown, USA would probably cost about half to build, if that. I'm having a very hard time trying to understand how the fee can be justified on an hourly basis. Does it take twice the number of hours to design the place here as opposed to Anytown? I think not. E.g., at $95/hr does it take 1,000 hours to prepare the construction documents?
I really like the firm and the lead architect. I'm just having a hard time understanding the fee. You know, if they'd said "It's $175K for the actual labor and we charge $150K for the artistry" I could mull that over, but trying to justify it on a purely hourly basis based on the insane local construction cost makes me feel like I'm being taken advantage of.
Am I being unreasonable in my expectations? Are they?
[ For the $1M+ I'd save, maybe I should have the place designed and built in Anytown and helicoptered over here! ; > ]
If God hadn't meant for us to eat animals, why did he make them out of meat?
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For a project with a budget of over $1mil, 8 to 10% should get you a standard "B141-Standard Form of Agreement Between Owner and Architect". That's all inclusive up and including Contract Administration (CA) services. CA mainly consists of contractors payment requisition reviews, change order preparations, change directives and issuing Certificate of Substantial Completion other tasks associated directly to the administration of the construction contract. Site visits duirng the CA phase are limited and not intended to administer and oversee the work of the contractor. That's what Construction Management is for. The "B801-CMa Standard Form of Agreement between the Owner and Construction Management" is far more time consuming and is very much worth a few more % points for all the reasons mentioned.
Google each contract and try to get familiar with how much work you will be receiving from each contract.
B141-Standard Form of Agreement Between Owner and Architect http://tinyurl.com/6aczhy
B801-CMa Standard Form of Agreement between the Owner and Construction Management http://tinyurl.com/685kaf
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I don't understand your post. "If built in Anytown..." Well, it won't be, so what's the point of wasting brain calories on woulda, coulda, shoulda? If you don't like the price, and you don't think it's worth it, you're free to shop around. That's the free in the free enterprise system.
If they are your "favored" architectural firm, it's probably safe to say that they are high on some other people's lists. Supply and demand (see above). You have but one chance to pick an architect for this house, they have a waiting list.
Regarding the hours involved - what does that matter? You're paying for a design, not pool cleaning. Say one architect spends 100 hours on the design, you love it, and he charges you $100K, and another spends 50 hours (or 200), you hate it and he charges $100K, which is the better _value_ to you. Please note I did not say cost - value.
I think you would also probably agree that someone who drops a couple of million on a house is probably going to expect more from it that someone who drops 25% of that. Similarly, they'll probably expect more from the architect, and very possibly the architect is allowing for a substantial amount of time for hand holding through the project.
The bottom line: Could you get a lower design price? Yes. Would you be as pleased with the design? {insert _your_ best guess answer here}
R
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On Mon, 14 Apr 2008 12:55:48 -0700 (PDT), RicodJour

As I said, if it was put that way instead of portraying that it will for example actually take 1,000 hours to do the construction drawings it would have sat a lot better and wouldn't have triggered my raised eyebrows.
Thanks for your good comments.
Gordon
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On Mon, 14 Apr 2008 16:13:00 -0700 (PDT), RicodJour

That's the way I want it to be as well. Look, I do custom software, big projects, and I'm almost unique in that I quote them at a fixed price up-front from a detailed spec and I bill milestones based on that price. We spend zero time arguing about this or that fee and 100% of the time doing the project, with mutual peace of mind. Oh, and I deliver.
It isn't paying a big fee I'm having a hard time with as much as the way it was "justified" and the indeterminate nature of it. I can live with "it's a lot because we're excellent and we deliver" but I have a hard time with "this item will take 1000 hours" when I know it won't. That tends to break the trust I want and need to have in them.
G
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On Mon, 14 Apr 2008 23:51:52 -0700, "Chuck News"

Thank you for your comments, Chuck. There is no question about their capabilities. They're a good sized firm (for Santa Barbara, anyway) and the lead architect that we'd be working with understands our tastes and goals and is very enthusiastic and highly-motivated to make us happy. Yes, my wife and I are co-conspirators. We've even set up a web site to manage communications, which, as you point out, are indeed critical. (If you haven't seen it already, check out Basecamp by 37 Signals http://www.37signals.com/ with is perfect for coordinating projects between multiple parties.)
Gordon
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