Red flag, yes. If you otherwise like the house, add a contingency for a good mold inspection. Or, walk away and keep looking!! (Besides, those dryer sheet smells are really hard to get rid of)

Huge red flag.

During househunting we went into a house with such a bad small our realtor stayed outside in the cold winter 😳

Huge red flag. Good idea to put a contingency for mold inspection if you do want to bid on the house, but my concern even if no mold was found or they paid for mold remediation is that the odor would never be completely gone -- some odors are very hard to get rid of.

If you can’t figure out what is making the smell, and/or it’s not fixable, don’t buy it. Or you’ll be the next one trying to sell it and hoping no one notices the smell