I am in the process of purchasing a house. The inspector smelled gas and his detector indicated a gas reading around the Hot Water Heater. The sellers had a plumber check it out for a leak. They did a diagnostic test using a liquid soap solution around the gas line, going into the water heater. They could not find a leak. It was on "vacation mode" and when he turned it to normal setting a puff of gas came out. He said pressure must have built up in the line and that is what the inspector's gas detector read. Is this normal for pressure to build up on "Vacation Mode". Is this safe and normal for this to happen?

There is a couple of things that could be going on.. There could be a small leak after the gas valve on the burner supply piping. (this would only occur when the hot water tank is fired).. This could also be caused by the rush of gas into the combustion chamber and some leaks out before it is all burned (start up only)..
Try soaping the connection of the main burner piping and firing the tank.. if you see bubbles at the connection there is the leak.. no bubbles and it is the second issue.
For peace of mind call the gas utility and have them send a rep out to check it out if you are not satisfied with what you find..

Pelle ends with the best advice of all, have the gas company check it, they will shut it down if there is any leak whatsoever. The draw back would be that they may not respond since you are not the owner. Your inspector could recheck it for more $$. I would not accept the owners plumbers verbal explanation.