I am so confused and need help here.

I am currently selling our home. We bought it in 2000. It was flooded due to water heater leaking in 1998 (that is, before we bought it). When we bought it, we did inspection and there was no problem of mold. There never have any leaking or flooding problem during our occupancy. My agent said that it is not necessary for me to disclose this to potential buyer. Is it true? I am still worried about any legal problems will occure after selling the house. But if i disclose it, will it affect the selling of the house?

Your advice is highly appreciated.