Urgent: Water Leak for brand new house, Please help!!!

[Serena Sun]

Hi Everyone, 

First, thanks to those who advise me to refinance our old primary to buy a new home. We just finished refinance and use it as the down payment for a brand new house, and it will be closed in couple days. 

Today is our walk through with the builder before closing!! Something totally unexpected happened. 

We were testing the new washer machine on second floor, then went outside for about twenty mins. We noticed that the mudroom ceiling was dipping water. We went upstairs, i saw the laundry room floor flushed with water. Some carpet around the door was also wet. Substantial amount of water (probably a gallon or so) trickled down the mud room through the light fixture in the ceiling. There was also a small leak in the garage (about several cups of water).

The builder said that they will repair the damage caused by water. My husband and I are pretty upset this happen to a brand new house, and we are very concerned. 

We have no experience about water leak, so would like to hear your opinion:

1. Should we close the house, or just try to get out of the contract and find another house?

2. If we still buy the house (my husband likes the view), what action can we take to ensure that everything has been fixed and there's no future impact?

We don't know how large the impacted area is. Once water got under the floor, it could spread freely. Does that mean insulation needs to be replaced? What about the ceiling? Would it expand or have water marks? Most importantly, would mold grow if it isn't completely dry and treated?

Do you think we might ask the builder to cut price because of the water leak? (it's a $850K house) How about ask builder to extend the warranty? How long will it be reasonable?

Sorry about all these questions and we really appreciate it if you can tell us what you think if you were us. 

Thanks in advance for your help

Best wishes

Serena