Get a good buyer's agent if you're in the market for REO properties - they are risky business,,,,,
Banks will also not accept contracts contingent on you selling your own home. So if you can purchase this house without selling your house it would be a bonus.You will need to perform your own buyers inspection and to de-winterize the home to check plumbing and utilities. If you are buying with an FHA loan the property will also have to be FHA APPROVED by the appraiser / inspector in addition to you having your own home inspection if you decide.
The fact that it was listed in September and was under contract and fell out leads me to believe an inspection turned up problems or the buyers financing fell through.
It is not prudent to look at properties especially bank foreclosures which usually are the deals until you have secure financing in place and can make an offer that day. Most foreclosures priced well in good condition receive multiple offers and go under contract in 24 to 48 hours.
Request a copy of the Sellers property disclosure statement from the listing agent. This will disclose any known issues with the property that the seller is aware of.
If you are considering purchasing a home I recommend that you use a good buyers agent to represent you. Many questions like this one can be answered to make sure you are fully protected when you go to buy a home.