It might be worth your while to at least put in a bid, make an offer, if you want to try to retain the property in your family.
I would suggest that if the property is still showing active on the MLS, then you may want to write the offer this weekend, as banks typically look at all offers on Mondays.
The process is not complicated, but it can be frustrating, especially if more than one offer is made on that property.
It only takes an hour or less to write a contract, depending upon your knowledge or experience in real estate, as the California Residential Purchase Agreement is 8 pages, and there are other disclosures to read and sign as well.
But again, it shouldn't hurt to try.
Good luck, -Jeni.
While the bank MAY ask if you were a relation to the former owners, I doubt it. There is a stipulation in the purchase of a short sale, that needs demonstration that this is a 'long arm' transaction. That is indeed understandable in that we in the general public are paying for the mess the banks and homeowners are in...But in this case, the foreclosure is complete and I don't believe there is that investigation on a foreclosure. Even if there was, timing is such that you were not a relation at the time of the foreclosure.
Although if I were their neighbors, I wouldn't be so happy to see him back in the property, taking advantage of taxpayers who have eaten the difference in the loss, nor seen their property values go down because of his foreclosure, however justified his circumstances were. As for your purchase you are free to purchase whatever you choose.
No one can fault you for buying a home that you are familiar with, appreciate the value and are credit worthy enough to purchase. Good luck to you!
Good luck, bank owned properties are priced to move and many are seeing multiple offers.