Your advice is great. We like the retention wall idea, that will work.
You asked when we got the house. We bought it 6 years ago, we've had water problems from the beggining. The inspector did point out the problem, but we were so naive we didn't think much of it (Live and learn!).
I have another question. You said I should watch the gutters, well, I noticed that in certain points of the house the gutters can't handle all the water, and a lot of the water just falls off the roof into the ground like a cascade. What do you do in that case?