Yes, as nonresidents, you will file the 540NR. It is unlikely that the amount of withholding would be spot-on. It could have been understated or overstated.
The Franchise Tax Board is the name the state gives their Dept. of Revenue. While there is a Franchise Tax, it is related to businesses, not the sale of a home. The FTB more than likely withheld state income tax on the sale.
Franchise Tax
