Weapons in the Bidding War

Instead, agents say bidders increasingly offer more money above the listing price, as well as contract terms that promise the equivalent of more money.

"You lose four houses, you'll do whatever you can to win. . . . But in the final analysis, there are only two issues that matter to people. One is money and one is convenience," said Marj Rosner, manager of six Long & Foster offices in Northwest Washington.

Cash incentives in the contract include generous escalator clauses, where the buyer promises to pay $2,000, $5,000 or whatever above any other offers. Ridley, the Chantilly real estate broker, said he has heard recently of "unlimited escalation addendums," meaning no ceilings. The bids keep going up until somebody cries uncle.

Rosner said some buyers are offering six or seven months of free rent to sellers. "Letting sellers stay till the end of this calendar year, that gets people's attention," Rosner said.

A fat earnest money deposit on a house, written to a settlement attorney or other third party to be held in escrow account until settlement, also wins points because it shows the seller how serious a buyer is.

Money that's held in escrow, however, can remain in limbo if a deal goes sour. So writing a fat earnest money deposit directly to the seller, rather than sending it to escrow, is a new twist that's even better as far as sellers are concerned, some agents say.

Two Army doctors stationed in South Korea recently won the bidding on a house in Northwest Washington in part because they agreed to include a $40,000 non-refundable check in their $887,000 offer, which was well above the listing price, said agent Kathi Higdon Kershaw of Long & Foster's Kentlands office.

"We were apparently neck-and-neck with another offer," Kershaw said. "We got it because, one, the other agent didn't bother to show up in person with the contract presentation, and, two, because of the non-refundable check."

The check, sent directly to the sellers' address, "made the sellers feel comfortable that the offer would stand up," Kershaw said. Because the couple, both Army majors, had never seen the house, the sellers might have worried that they'd walk away when they came back to Washington this month, Kershaw said.

Personal letters are popular in some circles, but not others.

For instance, Rosner said, she is concerned that letters might violate fair housing laws and prompt lawsuits. She says she tells buyers' agents not to submit them. She recently was organizing a list of offers that were to be presented to the seller of a Falls Church house. She threw out letters that were attached to three of the four offers before the seller ever saw them. "I think it's inherently discriminatory" to show letters that contain photos or describe buyers, Rosner said.

Others say they allow or encourage letters because it's up to the sellers to decide which offer to take.