Great questions, but it doesn't sound as though you are working with a Realtor to help you through the process.
There is a lot of information and due diligence which needs to go into buying either a Short Sale or REO (bank owned property). On Short Sale, you need to know if the NOD has been filed and when? You need to know who the Mortgages are with - which lender will be involved in approval. Has the Short Sale package by the seller been submitted and approved?
Assuming you have all these questions answered, and that you still have an interest in the property you would then structure your offer to reflect not only what you would hope to pay for the home but after a thorough evaluation of the Comps in the area. Once your offer is submitted, and based upon if there are any other offers also being looked at you might want to give some consideration to inspections.
Inspections are ALWAYS at the discretion of the Buyer. And in a Short Sale or REO property you will likely be the person paying for them regardless if you buy the house or not. Given the fact the seller is upside down on the loan the chances they will or can pay for inspections isn't likely.
And NO pest and mold are not over lapping or necessarily evident on one repor, however PEST should never be over looked and for many buyers they would also same the same of Mold. In any case it should by the buyers decision and following an informative conversation with your Realtor.
Andy, I realize many people feel as though Realtors are over paid for what they do, but in truth in a market where Declining Values, Short Sales and REO's are mainstream a buyer would be ill advised to not work closely with an Agent.
I hope you will give me a call, but in any case I wish you the very best and success with your Home Shopping.
WINDERMERE WELCOME HOME