Water damage during inspection… what next?

I am currently in a two week period where we can get our escrow deposit back if we decide to pull out or we can negotiate new terms. During the home inspection, they found water damage in the master bathroom from looking under the home. The rest of the house was fine, new HVAC, new Roof, new water heater, completely renovated but the master bathroom will have to be fixed due to the water damage found in the inspection. We are nervous about moving forward and I personally would like to request to delay closing until this is resolved but we only have two weeks to get our $2k “good faith” escrow deposit back so we need to make a decision on wether or not this is too big of an issue to move forward on the house. What should we do ?