It was a whim. I had looked at local cars and they were overpriced crap. The seller was in my area, and the pictures looked good.
First, start with Kelley Blue Book and NADA for values on the cars you are looking at. Don't bid over what they are worth including transportation to you. I usually add high retail and low trade-in together and divide by two. That gives you an average fair market value.
Ask about service records, check the VIN with a local MB dealer for the service history, see when the car was last serviced, and ask if the car comes with the original owner's manual and toolkit.
My car ('82 300SD) was a good value for the price. However, when I took it to my local indie MB tech, he found $6,000.00 worth of repairs that he felt needed doing. I disagreed, installed a $150.00 CD deck myself, had him do a valve adjust, valve cover gasket, and replace all of the glowplugs. His repairs cost me about $300.00. It runs great, and I still haven't figured out what he meant when he said that my car needed new "thrust mounts". No one else here knows either...
Also, there was a good point made earlier. You can sometimes get a great deal from someone who didn't sell their car because of too high of an opening bid, or their reserve was not met. Make them an offer. Check the seller's feedback, references, and stay within the value of the car. Don't get over-anxious! Remember, used cars are like buses. The next one will be along shortly...