The fee can be sufficient for the service phases 1-4 (HOAI), including construction supervision it would rather be too little. There are several HOAI online calculators where you can roughly estimate it with the expected construction costs. From service phase 5 (execution planning), as the construction expert has already mentioned, the construction companies do it themselves again.
The price difference arises later because the general contractor probably does not pay their architect according to HOAI, but makes their own agreements (of course lower). This can be justified, for example, by the fact that the architect gets the customer assigned directly without having to do advertising/offers and therefore actually has less work.
For a 170m² house, the architect would receive about 4 to 5 thousand from a general contractor for the creation of the building application and only this amount could then be credited to you, everything above that would be the additional costs. Please note that these figures can vary with each construction company. This is intended only as a rough guide. Tendency is that the architect will do more for smaller companies than for large ones and thus, of course, the payment is also adjusted.