We found a good article in Money Magazine: The 5 questions to ask before you Buy A Home. It's the biggest single purchase you're likely to make, so ask yourself:

• How much debt can I handle? The traditional guidelines say your total debt including your house, car, credit cards, and other bills should be no more than 36% of your gross income   that means before taxes. So let's say you earn $50 thousand dollars a year. Your mortgage shouldn't be higher than $1200 a month. If it's more than that, you could be setting yourself up for trouble.
• How much will it cost to live here? Things break, roofs leak, termites can move in. So set aside 1% of the home's value for annual maintenance.
• How much house do I need? Don't dream too big! I know you want the 4 bedrooms and the swimming pool. But you need to be able to pay your mortgage and put money away for retirement or your kid's college. So maybe the 3 bedroom place with the garden is a better choice.
• What's the history of the house? If the house has a history of insurance claims, don't buy it. It may be uninsurable or the insurance may be more than you can afford.
• Who would buy this house from me? Because really, your home is only worth what you can sell it for. So if it's a fixer-upper that you don't plan on fixing up   or it has a view of a landfill that doesn't bother you   it might really bother perspective buyers. So look at the house not only from your point of view, but the point of view of the people who will buy this house when you move on.