Editors' pick: Originally published Dec. 1.

With listings scarce, homebuyers in the nation's hottest real estate markets are increasingly engaged in an arms race as they scramble to outbid each.

Some are writing "love letters" to sellers in a bid to forge a personal connection. Others with deeper-pockets are offering cold hard cash, offering sellers a much speedier deal by cutting out the cumbersome mortgage process.

However, the escalation clause is proving to be one of the more controversial weapons buyers and their agents are wielding in an effort to gain an edge.

In an escalation clause, a buyer will pledge to top all offers that a seller may receive by a certain amount or percentage, typically up to a certain amount, or cap.

Such offers aren't always a hit with sellers, who can wonder if they are for real or whether they are leaving money on the table by agreeing to such a deal.

Still, some brokers swear by this top-all-bidders approach, arguing it has made the difference for their clients between landing a home and losing out on one bid after another.

And given how tough buyers are having it now in competitive markets like Boston, Denver and Washington, D.C., escalation clauses are here to stay - at least until the next real estate bust.

"We use it, and it works in D.C. and other hot markets," said Marshall Carey, a D.C.-based Redfin broker.

The trend, like the real estate market, is seasonal, with bidding wars - and tactics like escalation clauses - reach their peak in the spring and summer before slowing a bit in the fall and winter.

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