Is there a way to stop the person who is living on the property from selling it. We are buying it from the deed holder, but he says they can sell it out from under us so to speak.

If you are buying a property using a Contract For Deed, aka Land Contract, aka Agreement For Sale, etc. etc, and if it is properly executed by all parties, and recorded to inform the world of your agreement, the owner should not be able to sell it to someone else. While you do not hold legal title to the property, you do have an "equitable interest" in the property, and the seller has promised to give you title to it when the debt has been satisfied. The only way that you can forfeit your interest is by not paying the debt as agreed. The length of the fofeiture period is determined by the percentage of equity that you have in the property. The greater the equity, the longer the forfeiture period. Your applicable state law would specify those times. If you just have some sort of lease/option to buy, you might be out in the cold.

If you have a legal contract for deed, the person who is in a contract to you first of course has to be the legal owner. Once into that contract, the current owner who is selling it to the buyer can not legally sell the property to another person, you as the buyer have a legal binding contract
( as long as contract for deed is legal in your state, not legal everywhere)

Now the buyer, my actually sell the house, since he has a firm contract on the house to buy it for a certain amount of money, So if he finds a buyer who will buy it for more money than he is paying, he could basically sell it, and at closing have one check to to the current real owner paying off the property, and a second check going to him for the profit.
( I do this from time to time, buy one on a contract, fix it up and sell it)

If the current owner was to sell it, the buyer on the contract for deed, could place a lien on the property for the money he has paid up to this point and also for the value of any improvements.

Also if the hosue was to sell for more than the contract price, they could sue for the profit the owner is trying to make.