Yes You Do!!!
"Ya, but if I tell people what's wrong with the property, they won't be interested and I won't get what it's worth."
Home buyers beware! This is the conversation I just had with someone who didn't want to list with a Realtor because then they would have to disclose the problems with the home.
This was all brought to the front of the conversation when I presented a Seller"s Property Disclosure to a customer who I was explaining about how the home selling process works. I gotta tell ya that he also thought that since he told me, I was to act confidentially, (kinda like an attorney) and not tell anyone about what he said because after all don't I work in "his best interests"?
Just so you know, I don't work like that, and neither do most other Realtors I know. It's hard enough for an inspector to find out things about a home, after all, there are things they can't discover or see such as a failing sewer pipe, if it appears to function when they visit the home. That's why we ask questions of the seller as well. The law is not on the side of the person who has knowledge of a problem and doesn't disclose the problem to a buyer either.
It's much easier to disclose and deal with problems right up front, it doesn't mean that your home won't sell, if it's priced right for it's condition and the market, there will be a buyer out there (usually). But if you try to trick somebody into paying good money for a crap house, it's like stealing and you will not fare well.