What constitutes seller breach of contract?

[Cee Boswell]

Made an offer to purchase a home in Charlotte NC.  Seller disclosed there were no existing problems with the plumbing, water heater, water supply, sewer etc.  The home inspection showed there were problems with the plumbing, and a water line to the water heater was not installed correctly.  Every sink, and tub in the house has poor drainage.  The water line to the water heater ran from the outside meter to the garage, around the garage door before being attached to the heater located in the garage.  The inspector did not believe the plumbing to the water heater was  installed properly and he did not think it was  installed to code. Went back to our realtor who  we got a receipt from the seller and an explanation as why it installed in the garage.  According to the seller,  the reason they could not run the water line underground was due to tree roots.  I asked them to provide proof  that the water line was installed to code  per City/County/State guidelines.  Asked for an extension on the Due Diligence. A five day extension was granted.  Not enough for them to address or correct their omission before closing.   Not sure how to proceed with asking for my DD money back.  Yes I read Section 4 in the contract.