flooded house

[nicky4rn]

What is the name of your state? PA. My family and I recently relocated to PA from Ohio. After 2 dissappointing house hunting trips we finally found a house. After negotiating a sale price and giving $5,000 downpayment the buyers then asked for another $10,000 which we reluctantly gave. After inspections and all necessary repairs were done - we drove from Ohio to our new home which we were to sign on the next day. 2 hours from our destination we received a phone call that the finished basement had flooded (now the 3rd time - both previous times were disclosed) but the sellers were in the process of pulling out carpets and repairing drywall. We decided to renegotiate with the sellers for a lesser selling price due to the fact that they obviously have a water problem in the basement. They refused our offer and also refused to correct problem the way we suggested (structural engineer to investigate) stating this was "overkill". We backed out of the deal and with our 4 children ended up in a rental with a year lease. Consequently, they sued us for our downpayment and we had to secure a lawyer ($500/hr!) He told us to agree to give sellers 1/2 the downpayment as we would end up spending more than that on his fees. Did we have any rights here? The home is still not sold now 5 months later and according to neighbors sellers have been seen repeatedly with hoses and pumps inside the now vacant home EVERY time it rains - so it is still having water issues. Please advise.