Tenant approved, lease is not signed yet, can we back out ?

[Sunny Hande]

Hi All,

This is my first post. We moved to a new house and are planning on renting our current house.

We have a property manager who gave application to 2 parties out of which the 1st party didn't meet the criteria but 2nd party did meet the criteria & has been approved. Party has signed/filled the rental application and paid for application screening. Our property manager has informed the party that they have been approved and they can move-in within 2 weeks but we don't want to rent our place to the 2nd party - is it legally possible to back out now ? we haven't signed anything yet and neither has our property manager signed anything with the tenants accept for screening their rental application and taking the application screening fee of $40 per adult.

House we are planning on renting is a 4 bedroom 1954 house with 1 bath in Portland Oregon ( frankly 3 bedroom and 1 media room which opens via sliding door to the backyard but does have a closet). Family planning to move in has 2 adults and 7 kids and we don't think the house can handle 9 people especially the toilet/bathroom with old sewage/septic system. We also are concerned about the washer/drying and the plumbing issues.

Any help in this regards will greatly appreciated.