We did final walk through but didn't find this problem. My

guess is the seller agent knew the leaking problem, so he turned off the main water valve till minute before our final walk through. After we done the walk through, the agent left the house first, our agent and us talked outside of house for a while before leaving. The next day escrow closed, we got the key and went into the house to plan our furniture layout. We found out the water valve was shut off and no water came from any faucets. Now we know why the seller agent didn't mind to trouble himself to go back the house and turned off the water valve.   

We turned the water back on. This was July 27th evening. I went back on 30th morning and found out the wet carpet, simply because the water was turned back on 3 days ago.

The whole scenario makes me believe the seller agent was tring to hide the water leak problem. The seller agent only acts on seller's behalf, it's hard to say the seller had no idea of this problem.