If it has a knock it could be rod bearings, main bearings, or a wrist pin. I would not drive it unless you plan on making the internals become externals with a catastrophic failure. A new engine is not cheap.
If the car has a Michigan title you should have no problem registering it in Pa. If the title is lost or missing make him get you a replacement. If he refuses stay away, there may be some shananagans going on. You don't want to buy the car, then go get a new title from Michigan and find out the car is stolen. Then you would be out a car and the 2k.