The majority of post sale disputes involve undisclosed property faults. In an effort to sidestep those lawsuits, most states require sellers to complete some sort of disclosure document as part of the real estate transaction. Sellers are required to reveal any material facts that could affect the price of the home or the buyer's decision to purchase.

Here's an example. If you are selling a home that gets water in the basement during a heavy rain, you would be wise to disclose it before the sale. Otherwise the buyer may pursue compensation or seek legal recourse. It is helpful to think of the disclosure as a form of protection for both parties.

The question of what constitutes a material fact is subjective and varies from state to state. Consult with your real estate professional and an attorney about what characteristics should be listed with a tendency to err on the side of revealing, not concealing. Clearly structural defects, like a cracked support beam, should be named as well as environmental concerns such as radon or asbestos. Sellers must disclose the presence of lead as part of a federal requirement.

Sellers tend to be wary of disclosure believing it will adversely affect sale price. However, most buyers prefer to negotiate around a disclosed defect rather than be surprised at the home inspection when they can walk away from the deal altogether.