I would say it's in limp mode or possibly valet mode if the previous owner had it tuned that way.
The 2-step thing being talked about above can be set up easily with ecu flash for any evo 8 or 9, but only works under certain conditions, ie: clutch in and moving less than 5mph. So it's most likely not that.

I would take it to a shop that knows evos and ask them if it's been tuned before and if so, get it tuned correctly.

 

After looking up "limp mode", I found that other error codes can trigger a precaution on the car.
I know that the O2 sensor was malfunctioning and will be replacing it, so it might be because of that.
Will see after it has been replaced.

Thanks for the feedback guys!

 

Just bring the car by and I'll try it out for you see if everything is working

 

I've got a buddy who's a mechanic, thanks! =]

 

^^^^^^^^^^

 

Forgot to mention this is my first car too =D

 

Then you should of ask him first and he could of told your exactly what it is.

 

Did you ever test drive this car before purchase?