The fact that you write: "seller doesn't want it to be disclosed thinking it might affect the value and desirabilty of the property" is a clear sign that your Broker would probably insist that these materials facts be disclosed!
Most items uncovered by a home inspection are minor and easity corrected.
For what its worth to you, this is what the California DRE says about disclosure in their reference guide:
This is an excerpt taken from the California Department of Real Estate Reference Guide, Chapter One.
"When acting in the capacity of an agent in a transaction for the sale, lease or
exchange of real property, failing to disclose to a prospective purchaser or lessee
facts known to the licensee materially affecting the value or desirability of the
property, when the licensee has reason to believe that such facts are not known to
nor readily observable by a prospective purchaser or lessee."
Reference Link :http://www.dre.ca.gov/pub_referencebk.html
James C Sorena
First American Military
The Military Home Buyer's Network
To be truly prudent as a buyer you need to get your own home inspections even though there are existing inspections on the property. Those inspecting for you do not typically have access to the existing Inspection Reports, thus you obtain truly objective reports of your own. After careful examination of any and all reports, if there is disagreement between the reports, your agent can have the differing inspectors meet together on site to resolve the issues. Supplemental reports would then be in order with any new or changed information.
The seller must disclose any existing reports regardless of their purported accuracy.
Just to clarify some terms
Listing agent represents the seller
Buyer's agent represents the buyer
The term "Selling agent" refers to the agent that sells the home to a buyer, i.e. same as "buyer's agent".
The following is not legal advice.
When a buyer has an inspection performed, they pay for it. If the buyer decides to give the owner of the property a copy of the report, which is common, particularly when they want to negotiate repairs, that the owner (and their agent) then have knowledge is must disclose that report to others (IMHO).
If the buyer does not give a copy to the owner, then they have no knowledge,
The rule on disclosures is that the owner and agent must disclose to buyers any information that is material in nature. Material means would cause a buyer to change their mind about buying (either to buy, or not to buy).