So here's the scoop,

I purchased an "Unlocked 8700r" phone off of ebay. Maybe that was my first mistake lol but now im stuck with the phone and need some help. I am very new to the blackberry world and don't know much about them. I have purchased other unlocked phones off of ebay and they work fine. But here are my blackberry symptoms: The signal icon jumps from edge to gsm to off to no signal constantly. I can make and recieve maybe 25% of calls and text messages and I get the messages almost more than 30 minutes after it was actually sent. I looked up solutions such as a hard reset and reloading the device software, but I simply can't figure it out and don't know what device software to download and how to get the new software to the handheld device. If there is a kind heart out there that could leave a very detailed solution. I would appreciate it SOOO MUCH. Thank you, I hope there is a solution and I don't have to throw this phone out, because it seems like a really nice phone.

A hard reset is accomplished by removing the battery. Do it for 30+ seconds.

To upgrade the handheld OS you need to download and install the handheld software and desktop manager on your PC. Start with the info and directions in these links:

Where can I get my device user manual? - BlackBerryFAQ

1st step to take if device is having problems? - BlackBerryFAQ

How do I reset my BlackBerry? - BlackBerryFAQ

BlackBerry Desktop Manager Downloads - BlackBerryFAQ

How do I upgrade the OS on my BlackBerry? - BlackBerryFAQ

So I tried those suggestions and they didn't work. Is there any other suggestions? I'm thinking that it could be a hardware malfunction?

its entirely possible that you have a bad device. also check the liquid indicator to see if there has been any liquid damage to the device

I have a couple of BB’s and one does the same thing, floats between edge and gsm. I have tried replacing the software also. I have come to the conclusion that the radio receivers become less sensitive over time and unless you are near a strong signal you will see the issue you are seeing. You may have found the reason it was on Ebay.
As Sith_Apprentice said above, check the color of the wet indicator under the cover. It should be white ( at least it is on mine ) If you purchased it from a reputable seller on Ebay you may be able to return it.
Also it will not do reliable data unless it gets to EDGE ( uppper case )
Good Luck