First, and foremost, NEVER take a reference for a Home INspector from the BUYER!!! ALL too often, there's a conflict-of-interest. What happens is, if a Home Inspector 'dings' a Seller's home all too often, then the Realtor will no longer use the Home Inspector for the Buyer. What this means is: Lost business for the Home Inspector. (Hence, the conflict-of-interest.)
You should get your OWN Inspector. Sure, get 3 names for the Seller's Realtor but DON'T hire them. What I suggest is you hire an Inspector that's ASHI-Approved. Consider hiring one that DOESN'T mainly work in your area. By doing this, you minimize your chances of finding an Inspector that has a 'relationship' w/the Seller's Realtor.
Also, hire your OWN Real Estate Attorney. These are the folks that know how to write Contingencies into Agreements of Sale and Contracts. DON'T go making 'agreements' on your word (or anyone else's), but ONLY with the advice of an Attorney. DON'T sign anything w/o first talking w/your Attorney and expressing any 'concerns' you have. He may have you write a Contingency into the paperwork before you sign. THAT'S what they're paid for. And find an Attorney that you can call in the Evenings (and on weekends) since this is when you're going to be house hunting. At worst, DON'T sign anything until the 'next business day'. (Then, you can FAX stuff and talk to him/her ...)
You see, the Bank doesn't loan $$$ on a home until they have it Appraised. The Bank doesn't close on a house until an Attorney looks over the paperwork. Now, if they are doing this, AND they are in the BUSINESS of funding the purchasing of homes, don't you think it would be in YOUR interest to have someone looking after YOUR interests???! This is where I'm coming from. It's not enough to go on someone's word or the like when we're talking about 10's of thousands, or possibly 100's of thousands, of dollars over the course of 15-30 years. You NEED people in your corner. And for about $1,000, give or take, you can have your own Attorney and Home Inspector working for YOU!
Now, I say run. Dry rot is what occurs as the result of 'something' getting wet, then drying, repeatedly over time. Mold and mildew are signs of 'contiguous' dampness and moisture vs. periodic dampness and moisture (as is with dry rot.) If you know the cause of the water/moisture/dampness, you go from there. I can't say what you should or shouldn't do if you find the cause. I CAN say, again, hire some professionals to work for you.
My best to ya and hope this helps.
Jay J -MOderator
PS: After re-reading your original post, you mentioned rodent droppings (new or old is unknown), priced 100k lower than 'comparable' homes, and more. From where I'm sitting, you know how the saying goes: If it's too good to be true, it probably is. Personally, it sounds risky. If you want it THAT bad, again, talk to your Attorney and your Home Inspector about contingencies and repair $$$ in escrow ...