How do I clear out a flooded house?

I believe what you've done is merely place the water incorrectly. Rather than clicking on the cauldron itself, you have clicked on the space next to it.

If that is correct, you can salvage the situation by picking up the water source with your bucket again, or by placing a block on it.

When you fill a cauldron, you can click on the cauldron itself to fill it up.