Once again, more good advice above.
I disagree on one small point. I always ask people why they're selling the car, even though I know they might not be honest. I believe that people sell their cars because they are tired of them and want something new.
Also consider the often said mantra from members on this site:
"the most expensive Mercedes you will ever own is the cheapest one."
Even though a car may be above blue book, it is sometimes worth paying more if the condition is excellent, if expensive repairs have been performed recently and documented (such as timing chain replacement, transmission overhaul, etc.), and if the car has a full and complete maintenance history with books and / or records to back it up.
2001 E430, Bourdeaux Red, Oyster interior.
1973 280SE 4.5, 170,000 miles. 568 Signal Red, Black MB Tex. "The Red Baron".