I did notice something on my own with my realtor on one of my subsequent walkthroughs - a large stain on baseboard in corner of one of the bedrooms. I thought that was very odd location; realtor and I thought it might be water damage from a fish tank or something.
I did ask the sellers about it at closing, with others present. The home owner did say that he was powerwashing the shingles on front of the home, and it appears the water forcibly entered through the home wall at that point and caused a leak and a stain. That seemed plausible to me, and we finished with closing on home.
We ripped up all the carpeting in 4 bedrooms few days ago. I saw more clearly that the underlayment was damaged, and the parts of the baseboard wer completely rotted / eaten away. It didn't look like totally water / rot damage to me. I pulled off the baseboard in closet, looked more suspicious. Significant amount of 'sawdust' debris around the edges from carpenter ants. I decided to cut out a 12" wide swath off the bottom of drywall to see what was behind. Found huge pocket of sawdust sandwiched between moisture barrier & insulation; 2x4 boards for footer and vertical supports were crumbling to almost 'toast' consistency.
I remain very disheartened/misled about this discovery.
