[Hocrest]

The red FWD signifies that someone put a fuse in to deactivate the AWD to cover up a problem with the transmission.
In the fuse panel under the hood by the battery you'll find a fuse in the AWD/FWD slot. Pull that out and you'll have no red "FWD" but most likely there is binding in turns. Do a search for "torque bind" to see your options from there.

Other than that, it sounds like you got a good deal. Congrats.