Wood rot tends to soften the wood, and it may also discolor the wood. A pointed tool can be used to probe the wood. My finger did just fine to demonstrate the condition of some deteriorated wood at this morning's inspection. For example, wood in contact with soil will tend to rot. The soil is wet and prevents air circulation from drying out the wood.
Fence posts tend to rot at the bottom and on top.
They rot at the bottom because they are in contact with soil, and on top because the water sits there and soaks into the wood. The middle of old fencing is usually in very good condition. Water runs down the posts and pickets, and there is lots of air circulation to dry the wood. If the new wood is likely to become wet, use treated lumber. We would like to do some remodeling before we move in .