Google's Matt Cutts posted a video on the question How can I research a domain that I may want to purchase?
Matt Cutts gave a few tips on what to do, what steps to take, when researching a domain name buy.
(1) Do a site command and if no content is found, that can be a bad thing. Of course, if the domain name was never registered or is new or is parked, then it is likely no content will be found. But if it is buying someone else's domain name, then no content found is a red flag.
(2) Search for the domain name without the .com and see what people wrote about it. See if there are bad stories on it. See if someone went around and did a lot of spamming.
(3) Use archive.org to see the site before you owned it. Did it look spammy?
(4) Ask to see Google Webmaster Tools and look for messages and stats there.
(5) Ask to see Google Analytics or other analytics they may use.
Now if you do buy a domain name that has issues, then you can submit a reconsideration request. Matt Cutts said that before you do that, ask yourself why you bought the domain name. Was it for links and rankings or just because you like the domain name. If it was for links, typically those links will not help you. You may want to disavow all those links and go forward with the reconsideration request to start new.
Here is the video:
Forum discussion at Google+.