Glue or nails for siding repair

First off, never assume anything. You should take some pictures and know the basic dimensions of the house. You could talk with some local contractors, armed with pics and dimensions and get some ballpark prices. New siding on an existing building can go $250 to $400 a square (10ft X 10ft), removal and replace.

Just because your inspector found some rot, don't expect the sellers to discount for an entire siding job. You can try for what ever you think you can get, but I bet your offer to buy contingencies won't cover that. Unless the inspector committed and said the siding was unserviceable, you will need to negotiate.

Wood siding can last 100 years if well maintained, but I have seen 20 year old siding that was junk. The type of wood, whether the wood was back primed when installed, and how often it was stained or painted will make a huge difference.

Although this is not in a pure sense a home improvement question, I could not stand to not answer this one. I am a home inspector and these questions come up all the time with my customers.

While products like Tyvek do act as a drain plane to some extent, they're not truly waterproof. They're designed to allow vapor to easily pass, and therefore they're inherently an imperfect waterproofer. They should be considered a second line of defense against flawed siding installation and occasional wind-blown water intrusion.

The flashing around windows and other penetrations has as much to do with stopping airflow as it does with stopping water. Housewrap is mostly concerned with air leakage, which can dramatically affect the energy efficiency of a building's envelope.

The bottom line is that nails in the field are less likely to be subject to water on a regular basis, and they do somewhat self-seal. Window flashing is much better at self-sealing and is used in high-risk areas. Housewrap should not be considered a substitute for proper siding drain planning. Steel and vinyl siding channels, for example, must lap properly in order to direct the flow of water outside the siding.