Since you stated you are 1st time home buyers you will get the 8000 tax credit. Since the home is a repo you will want to research the deed and make sure there are no other liens that were not accounted for during the master commisioner sale. I would think the bank has bought this property back and is trying to cut their losses so offer well under the list price (you can always come up) if this is a private seller don't offer too low as you can insult the seller to the point they won't deal at all.
With that being said you will have 30 days beyond the closing to purchase buyers title insurance be sure you get it.
Definately get the home inspection, there will probably be no contengencies allowed so make everything as simple as possible.