Red Flags to Watch Out When Hiring/Choosing a Software Development Partner

Intro

Let’s start with a story… A few years ago, Andrew Martinez-Fonts, VP of Product at Honey Sales, was leading a vendor selection process for a small internal web app. His team sent out a detailed, 10-page RFP and received bids from three firms.

Two of them followed up with clarifying questions, scheduled calls, and made sure they understood the goals behind the project. The third vendor? They submitted a bid that was nearly half the price of the others – and didn’t ask a single question.

“When I asked if they wanted to go over the requirements,” Martinez-Fonts recalls, “they said everything was clear. They seemed confident, had some decent Trustpilot reviews, so we moved forward.”

But things quickly fell apart. The vendor delivered late, missed core requirements, and the cost of recovering the project ended up being higher than what the more expensive vendors had initially quoted.

“It was a pretty classic case of ‘you get what you pay for,’” Martinez-Fonts said. “And I learned that a vendor who doesn’t ask any questions up front is probably not going to work out.”

This story isn’t unusual and it’s exactly why choosing the right software development partner isn’t just about budget or speed. It’s about finding someone who asks the hard questions early, anticipates change, and has a process that protects your time, money, and sanity.

At Brainhub, we’ve worked with a lot of companies who’ve had to dig themselves out of situations like this. These experiences have helped us spot the warning signs early, before they turn into costly mistakes. Here are the red flags to watch for, and what they often signal long before a single line of code gets written.

How to choose the right software development partner – 11 red flags to watch out for 

Here are the most common red flags that you should be aware of before choosing a software development company: 

1. Selecting a partner based on cost only

I get it – budgets are real. But if your main (or only) filter for picking a software devlopment partner is “Who’s the cheapest?”, you’re not saving money. You’re setting yourself up to spend it in far less fun ways later – think bug hunts at midnight, surprise invoices, and code so fragile it flinches when you look at it wrong.

Cost should absolutely be part of the decision but it shouldn’t be driving the car. A smart choice balances price with things that actually impact your project’s success, like:

• Technical competency – can they show you projects like yours that actually shipped?
  
• Domain familiarity – do they understand the quirks of your industry, or are they learning on your dime?
  
• Communication & process – do they keep you in the loop, or do updates feel like pulling teeth?
  
• Quality & maintainability – is the code built to last, or just duct-taped together until launch day?
  
• Risk management – do they plan for the messy stuff like compliance, security, surprise scope changes or just hope it doesn’t happen?

Cheap, in isolation, is a trap. And here’s what that trap might spring:

• Corners get cut. Testing, documentation, architecture gone or barely there. Short-term savings, long-term tech debt.
  
• Timelines slip. A low bid often means a small team stretched too thin. When you’re not their only client (and you're not), guess who gets deprioritized?
  
• Accountability fades. If they’re just racing to hit a bargain-basement contract, they’re unlikely to flag potential issues early. Proactive problem-solving doesn’t fit in the discount bin.
  
• Scope creep fees lurk. That rock-bottom quote probably doesn’t include security audits, performance tuning, or proper third-party licensing. You’ll pay for those, just later, and with interest.

If everyone in the pitch meeting is chanting “lowest price” like a mantra and can’t clearly explain how they’ll actually deliver results, that’s your cue to walk away. Fast. In software, cheap can turn expensive very quickly.

2. Lack of a Project Manager or project delivery framework

A Project Manager should always be part of the picture – full stop. They’re the ones responsible for making sure the software actually gets delivered. If an agency’s offer is to hand you only a few engineers without someone who’ll help handle ongoing work, that’s a major red flag. 

It usually means you're left to carry the entire load – coordination, communication, chasing down progress. And that’s not a fair setup unless you’ve explicitly planned for it and have your own PM ready to take lead.

Otherwise, you’ll quickly find yourself in a situation where no one’s truly accountable for the delivery. What I’ve noticed quite frequently is that some companies (particularly those who are developing a software product for the first time) assume that working in an Agile workflow will somehow handle all of that. In reality though, Agile is a framework for managing ongoing work, not delivering a scoped, end-to-end project.

I also suggest “pressure-testing” the agency against how they plan to deliver what they’re promising. Ask them: “Who’s managing this?”, “How will you deliver it?”. If those answers are vague, you’re in for a rough ride. If there’s no clear plan, no roadmap, no sign of structured project delivery, it means they’ll be figuring it out as they go – on your dime.

3.  Radio silence and vague updates

If a potential software partner struggles to respond to basic questions, misses follow-ups, or takes ages to send over a proposal before you’re even working together... that’s not “mysterious genius energy.” That’s a communication red flag waving at full mast.

Good communication doesn’t magically switch on after you sign a contract. If they’re unresponsive during the courtship phase, imagine how “responsive” they’ll be once they’re juggling five other clients and you’re no longer shiny and new.

And once the project kicks off, you should expect a clear communication framework – not a few random emails or the occasional vague “We’re working on it” message.

Let’s be clear, you’re not asking for a 12-page PowerPoint every Friday. But you are entitled to basic visibility like:

• What’s being worked on right now?
  
• Are we on track for the timeline and budget?
  
• Have any roadblocks or changes come up?

If you're flying blind and getting updates only when there’s a major release (or worse, a fire), that’s a problem. The vendor should be leading the communication, not waiting for you to chase them.

Weekly check-ins, a shared project board, or even just consistent Slack messages – all of this builds trust and shows they’re in control. You should never feel like you have to guess where the project stands.

If a vendor can’t manage communication, they probably can’t manage your project. Communication management isn’t just a “nice-to-have.” It’s a core pillar of professional project delivery. And yes, that includes setting expectations, defining roles, and telling you when things are off-track – before it becomes a mess.

So if your vendor tells you, “We’ll be in touch if anything comes up,” that’s not reassurance. That’s your sign to run.

4. Engineers playing project ping-pong

Ever tried to write complex code while mentally switching between two (or five) different projects? It’s like trying to play ping-pong while answering customer support emails at the same time. Context-switching kills focus, and in software development, focus is everything.

If your engineers are constantly jumping between multiple client projects, you’re not getting their best work. You’re getting leftover brainpower squeezed between other deadlines.

The reality is that many agencies run on a bill-by-the-hour model. That means keeping engineers fully booked, often across several projects at once. Sounds efficient, right? For them, maybe. For you? Not so much.

Why it matters:

• Complex problems need deep focus. Most software issues aren’t solved in five-minute bursts between meetings. They need immersion, something that’s impossible when engineers are mentally ricocheting between clients.
  
• More projects = more mistakes. Every context switch increases the chance of errors, overlooked details, and sloppy handovers.
  
• Progress slows down. Juggling clients doesn’t just stretch timelines, it creates confusion, delays in decision-making, and a constant game of catch-up.
  
• You lose clarity. When no one is fully “owning” your project, it’s harder to hold anyone accountable or get straight answers.

Ask your potential partner how they allocate their engineers. If you hear phrases like “shared resources,” “flexible allocation,” or “we shift people around based on demand,” that’s code for “our team’s attention is up for grabs.”

You want dedicated focus. Maybe not full-time on one thing forever – but enough continuity that your developers actually know your product, your goals, and your tech stack without having to re-read their own notes every Monday.

5. Deposit exceeding 50% or more of the project’s quote

Deposits tend to stir up strong opinions when it comes to software development projects. If you scroll through a few forums or videos, you’ll find people describing them as a way for vendors to "hold clients hostage." But here’s the thing; deposits themselves are not a red flag. They’re a perfectly reasonable part of doing business, especially in a market where more and more clients are struggling with cash flow. 

From the vendor’s perspective, a deposit is simply a way to secure against the risk of non-payment. It’s not about locking the client in, but making sure work that starts in good faith doesn’t end in bad debt.

How deposits are handled can vary. In my experience, it’s rare for vendors to ask for a majority of the project cost upfront, unless you’re working with freelancers or very short-term engagements. Most agencies will ask for a deposit that covers one or two invoices ahead, or around 20-30% of the total project value in a fixed-price setup. 

I’ve seen clients actually prefer this approach. It creates structure and shows commitment from both sides. The key is that the deposit should be proportional and transparent. If someone’s asking you to front half the project cost without a detailed scope or plan, that’s when it’s worth raising questions.

But in general? Deposits are standard practice. 

6. References you can’t verify

I’m not saying you should dismiss user stories or case studies published on a company’s website. In fact, that’s how many top-tier software agencies land their clients, so it’s a perfectly legitimate marketing tool.

The real question is, do the case studies look credible? Are the companies mentioned verifiable and relevant to the kind of project you’re planning?

If the agency hasn’t worked with brands you recognize (and you don’t know anyone personally who’s partnered with them), I’d strongly recommend asking for references. But don’t settle for quotes or polished PDFs. 

Ask to speak with actual clients. Ideally, multiple. You want honest insights from people who’ve worked with the team directly.

When you do talk to references, here are three questions worth asking:

• What was the communication like? As I’ve already mentioned, consistent, transparent communication is non-negotiable. You don’t need a status call every morning, but you do need visibility, whether it’s async updates, Slack check-ins, or a running progress board. 

• How often did bugs slow things down? Bugs are inevitable, but a pattern of critical issues or a constantly growing backlog is a red flag. If the team can’t stay on top of quality, it usually points to deeper problems in the process. Ask the references if the vendor investigated issues quickly and kept bugs from stalling progress.

• Did they see proof of daily work or progress? Notice I’m not saying “did they release to production every day?”, because daily releases aren’t standard, and they shouldn’t be. What is standard is visible, regular progress. Engineers should be pushing code often. Not because it’s ready for release, but to push work forward, avoid blocking others, and show the project is moving.

7. No clue about your industry

You don’t need a development partner who’s an expert in everything. But you do need one who understands the terrain you’re operating in.

Healthcare, fintech, legal tech, logistics – every industry has its own language, standards, and traps. Your dev team should be able to speak that language, spot common pitfalls, and design solutions that make sense in your world, not just on a whiteboard.

But – and this is important – you also need to bring your own domain expertise to the table.

Yes, a good vendor should be familiar with things like HIPAA, KYC/AML, or audit trails. But no developer, no matter how experienced, can fully own your compliance. Why? Because they don’t know the exact assumptions, goals, or nuances behind your product. They can’t decide which features are regulatory must-haves vs. nice-to-haves. That context lives on your side.

In other words:

The development partner should have relevant domain exposure and ask smart questions.

You should appoint someone on your side – a domain expert – who understands your industry and your product, and stays involved throughout the project.

That collaboration is what keeps things compliant, practical, and aligned.

Without domain experience on both sides, here’s what can go wrong:

• Misinterpreted requirements. Engineers might build something that sounds right but totally misses how your users actually work.

• Compliance blind spots. They might follow your brief but if no one double-checks that brief against real-world regulations, trouble’s coming.

• Overpromised delivery. Without industry awareness, it’s easy to underestimate how long integration, testing, or certification will really take.

Your dev partner isn’t supposed to be your regulatory watchdog but they should know what questions to ask, and what’s typical for your space. If they don’t, you’ll spend a lot of time backtracking.

So yes, domain expertise matters. But expecting the dev team to carry the entire load is unrealistic and risky. The real magic happens when both sides show up prepared – your vendor brings industry familiarity, and you bring someone who knows exactly what “compliant,” “usable,” and “ready” actually mean for your product.

8. Unrealistic timelines 

Everyone loves a fast turnaround – who doesn’t want their custom new platform yesterday? But in software development, “fast” often comes with a big flashing warning sign. To really know what counts as a reasonable timeline, it’s worth chatting with a few agencies first. That way, you can spot the “too good to be true” promises before they land you in hot water.

As someone who’s been in this line of work for many years, I want to say that if a vendor is selling you lightning-speed delivery but can’t show you a clear roadmap, that’s your cue to raise an eyebrow. Rushing usually means they’ll cut corners and pile up technical debt.

A good partner? They’ll give you a realistic timeline, complete with milestones, and some wiggle room. They’ll also have an honest talk about what might throw a wrench in the works.

9. “Don’t worry, nothing will change” 

If your vendor tells you everything is locked in, nothing will change, and the project will run exactly as planned... congratulations, you’ve just been sold a fantasy.

In real-life software development, change is inevitable. APIs get deprecated. Requirements evolve. Stakeholders change their minds. Sometimes even someone on your team steps away, and suddenly the vision shifts. This isn’t failure, it’s normal. What matters is how change is handled.

If a vendor avoids talking about change up front, or worse, acts like it won’t happen at all, they’re either inexperienced or willfully ignoring reality.

A good development partner doesn’t just expect change – they plan for it. They should walk in saying something like: “Here’s our change management process – how we track changes, assess their impact, communicate them, and keep things on course.”

No panic. No drama. Just structure.

Why this matters:

• Change without a plan = chaos. If there’s no process for adapting, even small shifts can spiral into confusion, rework, or delays.

• You’ll pay the price. Ignoring the possibility of change now means scrambling later and that scramble will be expensive.

• False certainty is dangerous. Vendors who oversimplify everything at the start (“This will be easy, nothing will change”) are often the ones who disappear when things get complicated.

Think of it like this – refusing to talk about change is the project management version of saying “I’ll never get sick” and skipping health insurance.

So don’t shy away from change. Ask about it. Expect it. And if a vendor doesn’t bring it up on their own? That’s not confidence, it’s a red flag.

10. They avoid responding to ‘uncomfortable’ questions

I came across a great Reddit thread where someone suggested a clever trick for vetting software development partners, advising others to “throw them a curveball.” What they meant was to hit the agency with an unexpected, uncomfortable question to see how they handle it. For example, asking about the last time they disagreed with a client, missed a deadline, or why they might not be the perfect fit for your project.

Sure, it sounds a bit like the classic “What’s your weakness?” interview question. But it actually makes a lot of sense here. How they talk about those tough moments reveals a lot about their communication style and professionalism.

If they get defensive or seem like they’re hiding something, that’s a red flag. In those cases, I’d recommend proceeding with caution, or maybe looking elsewhere.

11. They deter from (or refuse changes to) the contract

Last but not least, let’s look at the formalities. Say you’re already in the negotiation stages, but the software development company resists or dodges changes to the contract. Especially around pricing, liability, or ownership rights.

A startup lawyer online said that it says a lot about a development company “what they’re willing to put in writing.” I agree with him that if your future partner is refusing to negotiate the contract, it’s probably not because they’re super confident. It’s because they’re trying to dodge risk at your expense. That’s a partnership you want to steer clear of.

Remember how I’ve mentioned some companies have a wrong assumption of being “held hostage” by a software agency if they requested a deposit? This is actually the area where you can come across such a risk. If you can’t secure full ownership and copyrights to the software in the contract, it could cause major issues for your business in the future.

You’re not just hiring coders, you’re choosing peace of mind

Spotting red flags early isn’t about being paranoid, it’s about protecting your product, your team, and your sanity. The real risk isn’t slow code. It’s fragile partnerships built on wishful thinking, unclear communication, and cut corners.

At Brainhub, we don’t chase velocity for velocity’s sake. We focus on delivery, clarity, and long-term success. We’re not here to tell you what you want to hear; we’re here to ship software you can rely on, even when things get messy (because they will).

Choosing the right development partner isn’t about who moves fastest. It’s about who helps you sleep at night.