I'm sure there are plenty of folks who have done something like this, so I wanted to see if there is a standard operating procedure or if this type of deal varies a lot from one to another. 

Whether your tenant starts out with a roommate, or wants to add one later, be prepared with good policies and procedures, and of course a well written rental agreement/lease.

The landlord can increase the rent by following the samenotice procedures.

Have a clear screening procedure going in and follow it. 

I would ask your management company about procedures for refis or helocs.

If it IS a good deal and we have 4 to 7 buyers interested we can THEN extend the contract for 2 weeks while we get the procedure to close started.

According to my research, the PM was also supposed to give documentations for the tenant to fill and the tenant was supposed to submit documentation for this relocation procedure, but none was given nor submitted.

By establishing clear policies and procedures, and making sure your tenants are aware of their rights and responsibilities, you can set clear expectations and prevent misunderstandings.

The rules and regulations make using IRAs procedurally painful (to me). 

@Jamie BiancoHouse hacking at its finest!