So, how do you protect yourself if you have signed an agreement without a buyer? 

You want someone who's been in the business for years, working full time specializing in what you're seeking to do, because if anything goes wrong with the transaction or the house after closing, it can create friction if you think your friend didn't protect your interests.

What if his tenant doesn't move out and it's a protected state like CA? 

please share any info on insurance companies that provide umbrella insurance for liability protection .

Experience will matter to some of customers, so you'll have to be specific about your history and success. 

@Jai JaniIf they sell and you have clear title and title insurance you should be protected but I also would run it by an attorney ahead of time as well.

Since I'm still new to this, would the community here please suggest what I should do to make sure I'm protected and good?

I'm an experienced investor, agent, and a project manager for an established general contractor, focused mostly on historic preservation, custom homes, and investment properties (flips and holds). 

I just closed one for a customer.

A well written management contract should clearly spell out what is expected of both the PMC and the owner, to PROTECT both and avoid misunderstandings.