How did this work out for you?
Mildew vs. mold and the other question is the source of the dampness or water. Only a licensed mold inspector can determine if it is toxic mold or not. Mildew you get from lack of ventilation, like in a bathroom without a fan. If it is an odor and not traced to a water source, bleach, paint and carpet can fix the problem. If it is an unknown black substance, i.e. mold the real trick is repairing the source of water.
Read your Contract - specifically the inspection part. Is it an AS- Is contract? What does your Realtor say? I hope you had one. Unless we see the contract, it is not possible to give you an accurate answer.
Regret to hear of the mildew problem.
Yes you should be able to back out if you are within your contingency period for inspections.
It's very easy to see mildew, hence your Realtor or you should have caught it before, anyway sometimes it is hidden in closets and we don't catch it on our first visit.
Hopefully, you have written a solid contract.
Can we assume that you made the offer site unseen? The Far/Bar As-Is gives you a very powerful inspection clause that let's you back out for just about anything you discover during the inspection period. The normal FAR/BAR purchase contract does not include an inspection. It must be added by an addendum. Assuming your inspection period is not over, then yes you can back out. If the inspection period is over, then I would contact a lawyer, as at the very least you are likely to lose your deposit.
Most contracts, even the As-Is FAR/BAR, provide for a 7 to 10 day inspection period which starts the day of execution (when signed by both seller and buyer) on which you can back out of the offer/contract based on the results of the inspection. Call your agent and have them go over the contract with you.
Charles Rutenberg Realty