If a seller misrepresents a listing can i sue for damages and fails to disclose mold issues?

No you can't sue for those costs. Its a fact that the owner/seller misrepresented his property. Its' totally unusable for you in that condition.You must remove your bid immediately, I don't care if it was accepted by the seller, makes no difference, hire an attorney in that region to represent you. I'm sure you used a contract that contained what is called a "weasel clause" that is if any condition was unsatisfactory upon inspection that would serve to null and void the contract.