Yes Jay this pipe will need to be replaced, but why stop there?
Are there other plumbing problems with the house? Sewer, Fixtures, water heater, heating, venting, etc.
Hire an inspector that can go through the house and list the things you will need to replace when you purchase the house, you will be able to use this list to deduct from the asking price. Do not rely on the realtor to do this for you. Hire your own.
The Local Plumber http://www.TheLocalPlumber.com