When a house or condo is sold, there are usually two real estate agents involved. The seller has his own agent, the buyer has her own agent. Usually, there is a commission, based on the sales price of the home. Most of the time, the commission, in the 5-6% range, is split, 50-50, between the two agents. While the seller is responsible for paying the commission, at closing, it is really the buyer who’s paying, of course.

There are other ways to pay a real estate agent, however.

One way that is becoming more popular is paying your agent a “flat-fee”. A flat-fee is just what it sounds like. Instead of paying a percentage of the sales price to an agent, a buyer, for example, pays a flat fee. Some buyers pay on an hourly basis, while others pay an up-front retainer, then a pre-determined amount, if and when they close on a property.

Why does it make sense for a real estate agent to be paid a flat fee?

Real estate professionals have traditionally been paid contingent on an outcome, even though, like [a] doctor and CPA, they cannot control it - the economic climate is what will determine how fast and for how much a home sells for.

Yet, agents are paid as though they can control the outcome and that “insurance policy” of only paying if successful is what makes this method of compensation so expensive.

Next time you’re looking to buy or sell a home, discuss flat-fee representation with your real estate agent. It might work out well, for both of you.

More: How Does Fee-For-Service Work? - The Talking Massachusetts Real Estate blog

Air Canada, Canada’s largest domestic and international full-service airline and the largest provider of scheduled passenger services in the domestic market, has more flights to Boston than any other airline.

This month, their website profiles our fair city.

Sure, Boston’s opulent old brownstones and elite universities still stand tall, but on my recent jaunt to Beantown I chose to skip the sights and indulge my inner hipster. On the itinerary? The newest trendy bars and restaurants, contemporary art galleries and chic boutiques galore.

Where does their intrepid reporter go?

She focuses on the South End. Lekker, and the Bernard Toale Gallery, to shop, Formaggio and the Butcher Shop for cheese … and horse tongue, and Franklin Cafe and Mistral for drinks.

What about Cheers and Faneuil Hall???

Complete story: Boston’s new beat - By Chantal Martineau, Air Canada

The following is the Weekly Activity Summary, as reported by the Boston Listing Information Network (LINK), for the week 9/23/2006 - 9/30/2006, compared to (last week’s numbers).

Number of new listings: 163 (251)
Number of price changes: 240 (195)
Number of properties back on the market: 25 (24)
Number of properties off-the-market: 89 (97)
Number of properties under agreement: 73 (80)
Number of properties sold: 93 (182)

Total number of properties currently on the market: 3,246 (3,237)

Slow week, for both new listings and also for number of properties sold. Keep in mind, properties showing up as “sold” this week went under agreement six weeks ago. I think there will be an uptick in sales, this fall, but nothing on the level of last September. Total number of properties stays steady, this week. Apparently, anyone thinking of selling this fall, has already listed their property for sale.

There are a lot of new condo buildings going up, all around Boston.

Perhaps you are thinking of buying a home in one of them.

There are still some very good reasons to use a buyer’s agent.

Even though you may have narrowed your search down to just one, or a couple properties, you still need to do an in-depth comparison of the project to other, similar developments. You need as much information as possible, before you make your offer. A buyer’s agent can help you with this.

Also, we may be entering a time where developers are offering incentives to agents, in order to get access to their clients.

If this happens, you may be able to put together a pretty good deal for yourself.

For example, suppose a developer is offering 2.5% commission to your agent, plus maybe a $3,000 or $5,000 bonus, on top that.

Well, it’s obvious what to do. Sign an agreement with a buyer’s agent, saying that the agent can have the regular 2.5% commission, but that any amount over that will be given to you, the buyer, if you end up closing on a purchase.

A buyer’s agent will almost always agree - the agent wants your business.

Meanwhile, you get a couple thousand dollars.

A win-win situation.

More: Why should I take a buyer’s agent along to buy a new house - By Greg Swann, Bloodhound Realty blog

What kind of buyer are you?

What kind of neighborhood do you want to live in? One where there are baby carriages, everywhere? One where there are no baby carriages? Why?

Look at Boston. In the South End, ten years ago, you’d have been hard-pressed to see more than one baby carriage a day. Now, there are two or three carriages, everywhere you look.

You still won’t see too many baby carriages, in the Back Bay. In the outer boroughs, such as Roslindale and Hyde Park, you may see baby carriages, here and there, but not a lot in one place, at one time.

For some, baby carriages mean “safety”. For others, they mean “family-friendly”. For others, they mean “community”.

Similarly, buyers sometimes use the “Starbucks criteria”. They won’t move into a neighborhood unless there’s at least one Starbucks, within walking distance.

What kind of buyer are you?

If you buy a house or condo, and don’t have a 20% down payment, your bank will usually require you to buy “PMI” - private mortgage insurance. This is because your bank worries that, if you can’t make your mortgage loan payments, they’ll have to foreclose on your property, and sell it off, out from under you. They figure they’ll be able to get at least 80% of the value, at a fire sale, so that’s why 20% is the magic number.

Basically, PMI is an insurance policy protecting the lender from the risk of you reneging on your loan.

The trouble with PMI is, buyers are basically paying for an insurance policy they may never use. And, PMI is not usually tax deductible, so it’s an added burden to borrowers, with no benefits.

Over the past several years, many banks have offered borrowers a way around PMI. Basically, they offer buyers a second mortgage loan, on top of the first 80% loan. The additional loan can be 5%, 10%, 15%, or even 20% of the purchase price, whatever the buyer needs. The borrower usually pays a higher interest rate on this second loan (it may be structured as a “home equity line of credit”, or HELOC), because there is more risk on the part of the bank.

The good thing about the second loan is, it’s usually tax deductible, just like a regular mortgage loan.

PMI is something to learn more about, if you’re thinking of buying, and don’t have enough for a 20% down payment.

More information: Weighing the Cost of Insurance - By Bob Tedeschi, The New York Times

During the past several years, loan rates have fallen at historic lows, both adjustable rate and fixed rate mortgages.

Over the past year and a half, however, rates have started to climb.

Now, many of those who borrowed are facing the prospect of much higher payments, as their three and five year ARMs begin to reset.

Therefore, many have decided to refinance into fixed rate loans.

Some however, will be better off refinancing into another adjustable rate mortgage, or even sticking with their current loans.

Details: It Seemed Like a Good Bet at the Time … - By Bob Tedeschi, The New York Times

The following is the Weekly Activity Summary, as reported by the Boston Listing Information Network (LINK), for the week 9/16/2006 - 9/23/2006, compared to (last week’s numbers).

Number of new listings: 251 (267)
Number of price changes: 195 (204)
Number of properties back on the market: 24 (23)
Number of properties off-the-market: 97 (80)
Number of properties under agreement: 80 (51)
Number of properties sold: 182 (151)

Total number of properties currently on the market: 3,237 (3,158)

Number of properties going under agreement is still low, showing a lack of movement on the part of buyers. Most people looking to buy before the year is out will probably get more serious over the coming weeks, and most sellers will be faced with the decision: deal or no deal.

Many people who want to become first-time homebuyers lack the down payment, credit history, or income to make such a purchase a reality.

So, some young people decide to buy a condo or home, with a friend.

This solves the problem of coming up with the money to buy, but it also can create a huge number of problems, for the new co-owners.

The Wall Street Journal Online recently discussed the topic:

Buying a home is risky — in part because it’s a large investment that can take a lot of time and expense to sell. And in an arrangement where two individuals are linked by nothing more than a deed and a mortgage, the risks and complications are heightened.

Say your co-owner gets a job transfer to another state. Do you sell the home? Do you buy your partner out or bring in a new co-owner? And what if you don’t even like a prospective replacement housemate?

If you’re the one who decides to move on, meanwhile, getting your cash out of the deal may be more complicated than if you owned a home on your own and immediately put it up for sale.

How to deal with this? Well, it goes without saying, one word: plan ahead.

Lawyers can protect your interests, as well as those of your friend(s).

Although it may sound cold, “You need an exit strategy,” one attorney warns.

Complete story: Tips for Purchasing a House With a Pal to Save on Rent - By Diana Ransom, The Wall Street Journal Online

The Ivy at Dana Hill an under-construction conversion of an historic Victorian-era bulding into 29 modern condominium homes. The property is located at 18 Centre Street, between Harvard and Central squares.

All are sun-splashed one bedroom and studio condominiums featuring kitchens with stainless steel appliances, granite counters & maple cabinets, designer Italian ceramic tiled-baths with deep tubs. Other features include bay windows, white oak floors throughout and nine foot ceilings. The professionally-managed building offers on-site laundry, 20 deeded-parking spaces, and is pre-wired for Internet, cable and phone.

It is close in proximity to buses and “T” stations and, of course, close to a world-class variety of shops, theaters, nightclubs and restaurants, all within walking distance.

Prices are in the $224,900-$354,900 range. Occupancy is scheduled for May, 2007.