The first option would take up a lot of my time I feel like with the possibility of the application revealing they wouldn't have qualified in the first place.

Here is what the auction states: A 1/25/2013 Phase 1 ESA revealed evidence of RECs in connection with the site, including a 1987 oil spill which was reportedly cleaned up and former use as a gas station from 1911 through 1951.

So, no matter what the inspection reveals, I'm stuck?

If there is some loan that's not on their credit report, they would still need to reveal that to the lender.That new loan is going to affect your co-borrows credit and DTI. 

They may reveal some valuable information.Be on the look out for deferred maintenance and outdated features.

I've italicized below the phrase from the ORC posted by @James Wise It is very revealing.

QUESTION: What information does/can a paid title search reveal that can't/won't be found relatively simply by searching public information on county websites?

I think they quoted something like $150 to do a title search that would reveal any outstanding liens.

You'd be surprised how many people have their profile public.Sometimes it can be really revealing as to their character.

But you must learn how to deal with this with a smile on your face, an up beat tone in your voice, and the goal of a positive resolution.80 percent occupancy is a possible red flag revealing some type of problems.