Many states have mandatory "disclosure" laws for sellers. Some sellers may be tempted to tell a few "white lies" when they want to sell their home - after all - how will the buyers find out? Sellers may think no harm is done by omitting facts or "bending the truth". The fact is there are some issues that call for brutal honesty or they may come back to bite them later! As your real estate advisor, I always recommend my seller clients to tell nothing but the truth - it's their safest course of action!
However, very few people will tolerate being lied to. Litigation often follows a failure to disclose a known fact about the house...
Here are a few common "white lies" that may get sellers in trouble:
"There has never been any damage from a disaster here" - previous damage from disasters can be fixed to the point where an untrained eye cannot see it. But home inspectors may be able to read telltale signs, and buyers can also buy a report from the Comprehensive Loss Underwriting Exchange (CLUE) which can tell them if any claims have been filed to fix damages (like a "CarFax" for homes).
"This home has XXX square feet more than the tax records indicate", or "This is a YYY acre lot". Unless the sellers have hired a professional appraiser who has measured their home and calculated the exact heated area, or a surveyor who has measured their lot, size discrepancies can be a common source for litigation.
"The roof is new". Sellers often say this if they have replaced the shingles within the last three years. Unless they have literally replaced the whole roof (including shingles, beams, trusses, sheathing and insulation) in the last year, they may be opening themselves to future litigation.
"This is a very safe community - there is no crime here". The fact is that very few people are really aware of all the crime in their neighborhood (some may not have heard about all the car break-ins that happened last week in the next street, or the attempted rape that happened last month in the community park two blocks away). If buyers ask about safety and crime, it is best to tell them to go to the source (the local police station) to satisfy themselves.
Most buyers understand that there are no "perfect" homes or neighborhoods. The older the home, the more likely it will have some defects (which the seller may or may not be willling to fix). They just want to know about everything that has happened and what steps were taken to correct the problem, and/or know how much will it take them to fix the issue if it still exists.
My advice - tell the truth and direct buyers to official sources for questions that may become controversial later on...