Course if you end up placing the dog yourself, you should express that you're not doing so because there is something wrong with the animal. Be a shame for someone to want the animal and pass it up because you said it wasn't working out and didn't tell them how or why. Especially if it's a sweetheart of a animal.

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"BOY: On a hot summer night, would you offer your throat to the wolf with the red roses? GIRL: Will he offer me his mouth? BOY: Yes. GIRL: Will he offer me his teeth? BOY: Yes. GIRL: Will he offer me his jaws? BOY: Yes. GIRL: Will he offer me his hunger? BOY: Yes. GIRL: Again, will he offer me his hunger? BOY: Yes! GIRL: Yes. BOY: On a hot summer night, would you offer your throat to the wolf with the red roses? GIRL: Yes. BOY: I bet you say that to all the boys!" -Meatloaf