Let's go on a bit of a journey into the past...

10 Years Ago = Occasional escalation clauses, some home sale contingencies.

The market was moving steadily, but we weren't frequently seeing bidding wars with escalation clauses.  Thus, offers with home sale contingencies were typically being evaluated in isolation, not at the same time as another offer without one.

5 Years Ago = So many escalation clauses, very few home sale contingencies.

The market was hot, hot, hot.  It was the norm to be competing against other buyers, so many (or most?) offers had escalation clauses.  Because the market was moving so quickly, buyers would rarely make an offer with a home sale contingencies.

Now = Some escalation clauses, some some home sale contingencies.

We're in an interesting spot now.  We are sometimes seeing multiple offers.  We are sometimes seeing escalation clauses.  We are sometimes seeing home sale contingencies.

Thus, I think it is reasonable for a buyer without a home sale contingency - but with an escalation clause - to carefully consider whether they want their offer to escalate as a result of a competing offer with a home sale contingency.

Home is listed for $500K.

You make an offer of $500K.

You hear that another offer has been received.  (You don't know it at the time... but it has an escalation clause up to $525K and it has a home sale contingency.)

You adjust your offer to have an escalation clause up to $525K.

All of a sudden... you're paying $525K for the house... all because of the other offer that the seller almost certainly would not have accepted anyhow, because of the home sale contingency.

The seller might really want you to escalate to $525K regardless of whether they would have accepted the other offer, because there was a competing buyer that wanted to pay $525K.  

But... if the seller wouldn't have accepted that other offer, do you want to pay $525K?  Or does your original offer of $500K seem more reasonable.

Given this new market reality (depending on the price range, location, property type, etc.) of some escalation clauses and some home sale contingencies...

1.  Consider asking whether an offer that a seller has received has a home sale contingency.  You might or might not get an answer.

2.  Consider tailoring your escalation clause to either only escalate against other offers without home sale contingencies... or... to escalate differently based on whether the competing offer does or does not have a home sale contingency.

OK, admittedly, that was a lot.  We'll talk this through when you're ready to make an offer.  For now, just some more food for thought.