FTHB with questions about foundation issues and structural engineer report

Hi all, we recently entered into contract for a home (FTHB) that was flipped in about 1.5 months. We found out prior to inspection that the previous seller had indicated issues in their disclosure that were not on the current seller's disclosure. The previous seller stated that there were cracks and settling issues with the home as it sits on expansive soil, to the point where there was a class action lawsuit prior to her ownership. When asked whether there were issues with the foundation, the previous seller disclosed "there is settling in walls and foundation – resulting in cracks". There were also other minor things (issues with the roofing, etc.) that were not disclosed on the current disclosure. The previous seller stated that they had cosmetically repaired the cracks but that this was not a long term solution. The house was a short sale after ~1 year on the market.

We asked about these and were told that when they purchased the home, their contractors did not mention anything about the foundation, and that the info may have been missed as they purchase homes in larger quantities. They told us they would have a structural engineer come out to take a look.

The structural engineer went out yesterday and said there were no foundation issues and that the cracks were purely cosmetic. He will be sending a detailed report to us that we can review.

I'm thinking that we will likely be withdrawing at this point even though the structural engineer has said that there is no issue. I find it hard to believe that the previous seller said there were issues, the house was on the market for ~1 year as a short sale, flipped in 1.5 months, and then suddenly the issues are cosmetic. What I'd like to know is if there's anything else I can do to ease my fears or if I should trust my instinct and withdraw from the deal? Am I right to think there are too many red flags around, or am I covered now that the structural engineer has OK'ed the house?

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