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Drilling a few test holes would be required to learn much about the underlying soils. I'd definitely do that if I bought the property.
The damage to the house may be related to the quakes, or it may be a function of a poorly deigned/built house. Probably less than 1 in 100 are done correctly and those perched on the side of a hill show the most problems. There's a way to build anything, anywhere. Most builders don't bother to properly engineer anything.
It's hard to tell you much from the upside-down camera phone photos you posted. My bet is that the house was poorly designed and built.
JR
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