She was supposes to come back in 3 days with the rest of deposit and sign the lease. She never passed by and returned my calls. After a WEEK. She stop over to tell me that

Her brother did not like the area, after July... so I told her she lost her deposit. Now she is taking me to small claims court. And demanding me 700$.. what can I do?

Show up in court, have all of your facts written down, documented any phone calls, all attempted phone calls and copies of all letters sent.

Then see what the judge says

The issue here first is that she did not sign a lease, merely agreed to sign one in 3 days. So after 4 days you were free to lease property to someone else.

And thus learn a lesson, never save an apartment, without a signed paper for a non refundable fee for holding it.