"Should we replace all of the wiring?"

Absolutly not. You have a choice of using fixtures rated for aluminum wire or "pigtailing" copper wire between fixture and existing aluminum wire. If you must ask how,don't mess with electric wiring,hire a pro.

From what I've read aluminum wiring itself is not so much the problem but the mix of aluminum and copper wiring is what causes the problems with fires. There are things that can/should be used to bridge between the different wiring but I would leave that to the professionals. I would think that maybe have to be disclosed also by the sellers. Is there anything in your home owners insurance that the wiring would be a issue. That's ridiculous about inspectors missing that. That's what you pay good money for to catch those things. Sorry.

Added later: A friend of mine in Texas had their home burn down. They were a very young couple and bought a older first home. It was determined to be a aluminum wiring issue. They had no idea that they had it or even was a issue until that happened. Getting someone knowledgeable on how to work with aluminum wiring and assess would be a good thing.

Even aluminum to aluminum connections are problematic if you use the wrong terminators. You need ones specifically rated for aluminum.

I would replace it all, and leave other things, until later. Wiring is very important, and I do know of a house with aluminum wire that burned to the ground. Safety always takes priority.

So my neighbor just went through this when he sold his house because his house had some installed aluminum wiring. He was not aware of any issues with it (or even that he had it) until the home inspector for the prospective buyer noticed it and reported it on the home inspection. The buyer had an electrician come out and take a look and the electrician said it all needed to be replaced, (Note that the electrician was a young guy who had never encountered aluminum wiring before). His estimate for the house was ~$30k.

FWIW I'm a have a degree in mechanical engineering and because I do a lot of structural work am now a registered structural engineer primarily involved with buried structures like concrete pipe, vaults etc. I add that only to say that I tend to research the reasoning behind codes as opposed to just blindly citing them and jumping to conclusions about the dangers of things that are not in "strict conformance with codes".

Continuing...my neighbor hired an electrician to come out and assess the situation. His electrician (an older guy who had worked with aluminum before) said the retrofit for aluminum wiring is to swap out the terminal screw connections with a copper pigtail which was vastly different from snaking all new wire through the finished walls. His estimate was ~$7k.

Truthfully I hadn't had any experience with it so I did some research online. My understanding is the potential hazard with aluminum versus copper stems from the large thermal expansion coefficient of aluminum relative to copper. Under use the aluminum will heat up and want to expand and similarly it will contract when it gets colder. At the "pinched" connections made when the wire is connected to switches, outlets etc. using screw connections the connection may loosen over time because of the cyclic expansion and contraction of the aluminum wires. if the connection loosens enough it may cause a gap across the connection which then could cause arcing across the connection when the circuit is in use. It is this arcing that could potentially start a fire within the wall. If the connection is replaced with a connection that allows for the expansion and contraction then the hazard is mitigated and the danger is no longer present. Practice for remediation of the connection is to use a slip-on type of connection to attach a copper lead at the end of the aluminum wire. the slip on connection does not depend on bends or pinching of the aluminum wire and permits the wire to expand and contract as needed. The copper lead allows connections to switches/outlets/other terminations the same as any other typical connection using copper wire.

Sorry for the winded post but it supports all the other posts (except cat_ky) that say it's not necessary to replace all the wiring but connections should be remediated and I recommend that an electrician perform the fix or confirm that the fix has been done properly. Seems to me that the previous owner as an electrician was not overly concerned about the potential hazard (as the risk is not that great but there is a risk) until he was selling at which time he decided to to the repair.

Hope that helps.

Sort of the long way of getting around to it but you are right sdello,OP's home very well might be 100% in conformance,except possibly light switch that OP changed. People that don't know what they are doing,asking others that don't know either isn't the best way of making sure it's right.

Thanks for the advice, everyone. The house is in Missouri. The seller never lived in the house. He was a house flipper and only owned it a couple of months before we purchased it--and he made a $70,000 profit. During the time he owned it, he remodeled it. I'm going to dig out the paperwork to make sure there's no mention of the aluminum wiring, but I don't think there is. And I'm sure that neither the owner nor the realtor mentioned the aluminum wiring.

I went over the inspections and there's no mention there either.

Also, the owner would never answer any of our questions. The realtor would say she couldn't get in touch with him or make some excuse. The house was also never officially listed as we purchased it before it went on market and so there's no list of features or anything like that.

Some of you say that it would be okay to continue with the aluminum wiring with modifications, but that wiring is 50 years old, and I would feel a lot better about replacing it and the electrical panel. We thought the house had all new wiring and that was one of the top selling points for me. I wanted my family under a safe roof.

Anyway, right now, we're still just trying to wrap our heads around this discovery. I guess the first place to start would be to have an electrician come out and look at the wiring and give us estimates, and then we'll decide what to do.

Thanks again. If I learn anything interesting, I'll update this post.

Why do you think the panel needs to be replaced? You need to have a reputable electrician come in and examine what's there and see what needs to be done.

If the flipper hired an electrician, there may still be recourse (you may wish to consult an attorney).