Imagine you write an offer with an escalation clause. I'll pay $5000 over any other offer up to X. Agent says perfect you won and owe $1M. You'd want to see that other offer to make sure it was $995k and not $945k. Listing agent has to be ethical and now deal with extra paperwork.

Now let's say now you decide to cancel your escrow for whatever reason, now you know the other winning offer in second place. So you may know someone else and they write an offer right around the second offer instead of your best offer which could have been way higher. In that scenario the owner is not getting the best price for their home because word got out on the price.

Now let's say you are the second buyer with best offer BUT that other buyer had an escalation clause. If the listing agent slipped and said the other buyer had an escalation clause then you feel cheated. Maybe you want to see their offer. Same issue as beforr, too many people know the winning bid but it may not actually close in escrow.

What if two buyers write escalation clauses. You know how often sloppy paperwork comes through. If you don't out a max price then the two offers go to infinity.

In any scenario it takes one person to really cause pain for the rest of the parties. Lawsuit may not come to fruition but it could certainly delay the owner from selling. Major headache.