Is this lease binding?

[Alex Rearmice]

I had a friend show my house for rent, and after receiving an application and speaking with someone on the phone, I agreed to rent to them. I prepared a lease and emailed it. The renter printed it, signed, and sent back with 2 checks, one for deposit and the other for 1st month's rent (post-dated to 8/1). I deposited the security/deposit check on 7/25. Well, since then, the tenant-to-be did a walkthrough with my friend, and it didn't go well at all. The renter was nitpicking out of control; when he left, he said "F U" (literally) to my friend; and when I spoke to him after the walkthrough, he sounded very demanding for small things plus wants to paint the house (which we had not discussed and I made point blank clear was not to be done). All in all, I'm not liking this person as a renter any more. He referenced having lined up movers for the 8/1 move-in date.

My question is this. I did not sign and return the lease to this person. Can I call them now, 7/28, and say I'm not going to lease to them? Then, return their deposit amount with interest, reimburse them for the mailing cost, and destroy (or return) their 1st month's rent check? This person only showed me the good side originally, but now I'm seeing 1 year (or more) of constant problems down the road, and I'd just as soon not rent to this person and keep looking for a better tenant.

Alex