I think that "In the interest of honesty" here serves the same purpose as the phrase "In the interest of full disclosure"—that is, in order to disclose fully any possible conflict of interest or [in this case] significant fact that may alter the client's (or buyer's) desire to rely on the agent (or seller).
As medica notes, the point of the question, taken as a whole, is to ask the agent or seller to identify any directly relevant negative information that the prospective client or buyer may be unaware of. This formula is essential in U.S./British Commonwealth contract law, under which, to be enforceable, a contract must reflect a true "meeting of the minds" of both parties to it. If one party knows but conceals some crucial fact bearing on the value of the objects or services being exchanged between the two parties, the contract may be voidable as not reflecting fundamental agreement by the contracting parties as to the things being exchanged.
Lon Fuller & Melvin Eisenberg, Basic Contract Law (1972) puts it this way:
There are, finally, cases which involve no discrepancy between "actual" intention and "expressed" intention, but where one party or both acted upon the basis of a mistaken assumption of fact, so that no "meeting of the minds" would have occurred had the true facts been known.
The requirement of full disclosure also dovetails with the legal duty of the prospective parties to a contract to bargain in good faith.
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