Salem House

So, Stacey and I put an offer on a house on December 20th and the broker counter offered on the 23rd. The broker said that an offer was coming the next day, so their counter offer was for the original price of the house. Stacey and I felt like we were getting such a great deal on the house that after much deliberation we decided to accept the offer at about 9 pm that night. They accepted our offer and the next day someone did submit an offer for the original price of the house that would have forced us into a bidding war. But the house was ours pending inspection. Today, was the inspection. Upon walking into the house, we found water seeping through the ceiling due to a busted pipe in the bathroom upstairs. Apparently, the people managing the house winterized the pipes, left water in the pipes and left the heat off. Not a good mixture - thus, resulting in a busted pipe and flooded kitchen. The video shows a little of the water, but it was all over the floor, the countertops, on the carpet in the master bedroom, seeping into the walls, and most likely underneath the linoleum in the bathroom. Anyway, I have attached a video of the mess as well as a picture of the outside of the house. This is what we are facing at the moment and unsure as to what will happen next...