After 3 attempts at requesting for a refund and after the threat of suit of breach of contract by the seller and his attorney ---- I paid a retainer fee and my attorney filed a suit against the seller, the agent, and the broker for fraud. After three days the seller agreed to return my deposit and recind the contract.
There was a listing agent involved and not just a discount brokerage that for a flat fee took the information that the seller provided and put it in the MLS without verifying it? So I am guessing that the room is either not up to code or a renovation where they did not pull permits. We are not attorney's first off so take what I say with that in mind. You certainly seem to have a case depending on the answers to the questions above. Of course your first action should be to consult a real estate attorney. Now agents/brokers can be held to a higher standard then the seller. So it will depend on all the facts as to who is going to be liable if anyone. So just take all the paperwork and consult your attorney. If possible use the attorney you used for closing as long as he is yours not the sellers. They will already have all the information of both parties.
Hope this helps,
An example of a matter of perception: Seller honeslty believes fourth room is a bedroom, but you believe it should be called a den.
An example of unintentional: Agent is used to an MLS system which allows dens to be called bedrooms, but is entering information on a system where the rule is dens are not bedrooms.
An example of carelessness: Agent is aware of den not a bedroom rule in his MLS, sees a bed in the den, doesn't check to see if there is a closet, labels it as a fourth bedroom anyway.
I think it might be over reaching to call the situation you referred to as fraud. You may be able to get out of the contract anyway, even if the misrepresentation was unintended, by invoking your inspection contingency right to cancel, if you have an inspection contingency in your contract.
A good home inspection and appraisal are beneficial when buying a home to avoid these types of issues.