I don't know of a true professional writer who would work for a new client without some sort of money paid up-front. After a relationship has been developed, terms become more flexible. Then again, if you're only paying $0.01/word, I'm not sure what type of people you're dealing with.
Typically a fair compromise is paying 50% down, 50% after work has been completed in a satisfactory way. I've done deals with 50% down, and then a sliding scale percentage based on the time it takes to complete the project up to standard. For instance, if they finish a week early, they get an additional 10%...but if they are 3 days late they get docked 10%.
As far as rates go...you get what you pay for. Most of my experience has been with
SEO/SEM related content...which goes for a minimum of $.20/word but usually I expect it to be around $.30/word. If the writer needs to do the keyword research the price can climb to $.50/word.
I guess it all depends on what you want the writer to help you accomplish...and the real value/impact you think it will have.
PM me if you are interested in finding an
SEO/SEM copywriter. I don't offer my services for this any longer (even at $.50/word it was very hard to justify for the amount of time it took), but I know of a few people that are worth considering if they are available.
Cheers!