Test drive it and pay attention to the usual stuff (ie - engine, transmission, drivetrain, interior/exterior, squeaks/rattles, etc).
If the car has been mildly/heavily modded, it may have been raced at the track. You might find a timeslip in the interior too (aka: a "clue" j/k!).
Of course people love to drive these cars hard from time to time, afterall they are 'stangs.
However, if you are concerned about the health of the engine, do a compression and/or leakdown test on it. If you are not comfortable with inspecting the car yourself, have a reputable mechanic look it over for you...g'luck shopping!
I am looking for specific things if there are any. For example on a 5.0 you look at the air silencer, fan, torque boxes, seat supports, ECT. These are easily seen signs of abuse. Is there anything like this for a 96-98 Cobra?
I'd say take note of the small things. What kind of condition is the interior in? Clean? Any rips? To me that says alot about how the car was cared for. Are the tires bald? Does it have any mods? Hows the alignment?
Also try to look for even minor missing/hesiation when test driving. Listen at idle for excessive ticking.
Most importantly: Be patient
I looked for over a year for my Cobra, it sucks but don't be in a rush.