As the Listing Specialist of our Real Estate Team, I spend a good chunk of time communicating with past clients, new clients and potential clients who wish to sell their home. When it comes to the Sellers Disclosure I never waiver when I discuss this important 
document. I've had sellers "ask" me not to mention the wet basement because it only floods every other week. I'm kidding but sellers often "forget " or omit material facts that could be detrimental to either party if it came to litigation. Mandated by most States, Maine has a mandatory disclosure which covers 5 basic areas: Water Supply, Waste Water Systems, Heating Systems, Fuel Consumption and maintenance, Hazardous materials and material defects (deed restrictions, roof and electrical are components of the major sections). Being completely truthful and honest is the best policy. This is a disclosure required by the State. It is a duty of the Real Estate Professional to truthfully investigate and represent the property to the best of their ability, including but not limited to personal observation and inspection, due diligence and prior knowledge. The Law applies to For Sale By Owner transactions as well, a fact that many are blissfully unaware.
Disclosure is the name of the game. Tell it like it is and there will most likely not be any costly surprises down the road. When I first entered my Real Estate career, I shadowed my 
Broker on a few appointments, I joined him on an appointment with a despondent client whose recently purchased home had a basement flooded with raw sewage. Upon our due diligence and interviewing companies to determine a remedy, a local landmark septic company showed us documentation that they had been out there to solve this problem several times in the recent past. The system needed an expensive repair due to tree roots blocking the outflow from the house. Something was afoul and not just the sewage back up. The Sellers Disclosure made no mention of the prior malfunction and was deemed an omission of a material fact. The seller was liable for a $40,000 bill, professional cleaning and mitigation of damage, replacement of the system plus alternative housing while the harsh Maine winter prevented work on the system. Failure to disclose cost that seller dearly.
When you are selling your home, a good seller disclosure might be your new best friend. The buyer and the seller don’t generally communicate during the transaction. However, this document discloses material information about the home based on the owner’s experience and knowledge, which can help the buyer make an informed decision.
The seller signs these forms, attesting that the information is accurate to the best of their knowledge. The disclosure can help prevent potential buyers from bringing lawsuits against the seller if the buyer discovers defects in the home after the property has been sold. It is in the best interest of the seller to be honest about any problems with the home, even if it gives the buyer more negotiating power. Disclosures are legal documents that can be used in court.
The requirements for seller disclosures vary widely from state to state. Your agent will have the correct form for the seller to fill out. The forms include questions regarding major repairs, environmental hazards, defects or things in need of repair. Generally, the seller is required only to make disclosures based on their observation and knowledge about the property from the time of their purchase through the date that the form was completed. However, the seller may also provide information they know about the home from before they purchased it.
Source: Realtor.com
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