Seller disclosure is critical to a smooth home sale and reducing seller liability, but not all homeowners are aware of its value to the home selling process. Seller disclosure, the obligation of a home seller to tell any potential buyer about problems in the property, is only mandatory in several states. However, it is rapidly catching on locally and many real estate companies are developing their own voluntary disclosure policies.
The reason is simple: disclosure reduces liability. If a home buyer knows about a problem up front, then they can't later claim you hid it from them. A buyer can file a consumer fraud suit that can cost you three times as much as taking care of the problem in the first place. So avoiding disclosure is like crossing the street with your eyes closed--eventually you will get hit.
Seller disclosure not only includes a duty to disclose problems you know about, but it also includes responsibility to disclose problems you should have known about. The days of caveat emptor (buyer beware) are over; now it's almost seller beware. It's better that they know about a problem now and resolve the issue than find out later through a lawsuit.