seller failed to disclose termite problem

[salmig]

What is the name of your state? Arizona
I went into a standard contract on an exclusive listing. The seller's agent agreed to represent both buyer and seller. The seller of the home had bought 2 months earlier using the same agent and was flipping the property to make some money. The agent advised me not to get any inspections since the home had been inspected recently, he forwarded the previous inspection report. A week before closing, the title company ordered a termite inspection which showed termites. I then found out through the termite company, that an extensive treament had been done only 4 months earlier, or about 5 weeks after the seller bought. Unfortunately, he did not disclose this on his SPDS. I cancelled contract on grounds of failure to disclose not on basis of termites being present. Since then, the seller has refused to give back my earnest money, $5,000, the title companies attorney helped himself to $1600 of it for his legal fees, and my attorney has racked up $2500 in fees. It has been determined from the prior sale, the seller and agent were aware of the extensive termite treatment done just before he bought. Yet, it appears he may walk away without any penalty, but I'm out $3100 so far. Do I have a claim, or should I just walk away with my loss.