Red Flags Guide
Last updated: January 24, 2026
Warning signs to watch for when buying or selling mobile apps. Learn to identify scams, bad deals, and problematic transactions before it's too late.
⚠️ Critical: Trust your instincts. If something feels off, it probably is. One red flag might be explainable, but multiple red flags indicate serious problems. When in doubt, walk away or consult with professionals.
Disclaimer
This guide helps identify potential warning signs, but context matters. Some situations may have legitimate explanations. Use this as a tool to ask questions and verify claims, not as an absolute rule. When multiple red flags appear, exercise extreme caution.
Red Flags for Buyers
Warning signs that indicate a seller or app listing may be problematic or fraudulent.
🚨Critical Red Flags (Walk Away)
Unwilling to Share Console Access
Seller refuses to provide read-only access to App Store Connect or Google Play Console for verification.
Why it's a problem: You cannot verify revenue claims without direct access. Screenshots can be faked. Legitimate sellers understand buyers need to verify.
Fake or Manipulated Screenshots
Revenue screenshots look suspicious, have inconsistent formatting, or don't match platform UI.
How to verify: Request direct console access. Compare screenshots to official platform designs. Check for pixelation, inconsistent fonts, or impossible numbers.
Sudden Revenue Spikes Right Before Sale
Revenue shows unusual spikes in the 1-3 months before listing, after months of lower revenue.
Why it's suspicious: Seller may be artificially inflating numbers through paid ads, fake reviews, or other unsustainable methods. Ask for 12+ months of history and verify growth is sustainable.
Refuses to Use Escrow
Seller insists on direct payment or "trust me" payment methods, especially for larger transactions.
Why it's dangerous: No protection if seller doesn't deliver. Legitimate sellers understand escrow protects both parties. See our payment options guide.
Asks for Code Access Before LOI/NDA
Seller requests to see your codebase or sensitive business information before signing an NDA or LOI.
Why it's suspicious: Could be attempting to steal code or ideas. Legitimate sellers protect their IP and require proper legal documentation first.
Cannot Prove Ownership
Seller cannot provide proof they own the app (App Store Connect ownership, domain registration, etc.).
Why it's critical: You may be buying stolen property or dealing with a scammer. Always verify ownership through official channels.
⚠️Warning Signs (Proceed with Caution)
Vague or Evasive Answers
Seller avoids direct questions about revenue, churn, or technical details. Legitimate sellers are transparent and prepared.
Pressure to Close Quickly
Seller creates artificial urgency ("other buyers interested", "must close this week"). Legitimate sales take time for proper due diligence.
Unusually Low Price
Price seems too good to be true compared to revenue. Could indicate hidden problems, declining revenue, or scam.
Poor App Store Ratings
App has low ratings (below 3.5 stars) or many recent negative reviews. Indicates product quality or support issues.
High Churn Rate
Monthly churn above 10% or annual churn above 50% indicates product-market fit issues. Requires constant acquisition to maintain revenue.
Owner-Dependent Operations
App requires seller's daily involvement for critical functions. Reduces transferability and increases risk.
Declining Revenue Trend
Revenue has been declining for 6+ months. May indicate market changes, competition, or product issues.
Legal or Compliance Issues
Pending lawsuits, App Store policy violations, or GDPR/privacy compliance issues. Can kill deals or create future liabilities.
Incomplete Documentation
Missing financial records, no code documentation, or incomplete asset list. Indicates seller is unprepared or hiding something.
Red Flags for Sellers
Warning signs that indicate a buyer may be problematic, unqualified, or attempting to scam you.
🚨Critical Red Flags (Walk Away)
Refuses to Use Escrow
Buyer insists on direct payment or "trust me" methods, especially for larger transactions.
Why it's dangerous: No protection if buyer doesn't pay or disputes after transfer. Legitimate buyers understand escrow protects both parties. See our payment options guide.
Asks for Code Before LOI/NDA
Buyer requests source code access before signing a non-disclosure agreement or letter of intent.
Why it's suspicious: Could be attempting to steal your code or ideas. Legitimate buyers sign NDAs before accessing sensitive information.
Unrealistic Lowball Offers
Buyer offers 50%+ below market value with no justification, or tries to negotiate aggressively after agreement.
Why it's problematic: Indicates buyer doesn't understand value or is trying to take advantage. Legitimate buyers make reasonable offers based on valuation methodology.
Cannot Verify Identity or Funds
Buyer refuses to provide proof of identity, business registration, or proof of funds.
Why it's critical: Could be a scammer or unqualified buyer. Legitimate buyers can provide basic verification. Request proof of funds before serious negotiations.
Pressure to Skip Due Diligence
Buyer wants to close quickly without proper verification or due diligence process.
Why it's suspicious: Legitimate buyers want to verify everything. Rushing could indicate buyer will back out later or dispute terms.
Requests Personal Information
Buyer asks for personal information (SSN, bank account details, etc.) before closing.
Why it's dangerous: Could be identity theft or phishing attempt. Personal information should only be shared through secure channels after agreement is signed.
⚠️Warning Signs (Proceed with Caution)
Excessive Delays
Buyer repeatedly delays responses, payments, or milestones without good reason. Indicates lack of commitment or financial issues.
Unrealistic Expectations
Buyer expects extensive post-sale support, unrealistic guarantees, or features not included in sale. Indicates buyer doesn't understand what they're buying.
No Technical Background
Buyer has no experience with mobile apps or the tech stack. May struggle to maintain the app, leading to disputes or support requests.
Vague Plans
Buyer cannot explain what they plan to do with the app or how they'll grow it. Indicates lack of serious intent or planning.
Multiple Deal Changes
Buyer repeatedly changes terms, price, or requirements after initial agreement. Indicates indecisiveness or bad faith negotiation.
Unprofessional Communication
Buyer communicates unprofessionally, uses threats, or shows disrespect. Indicates difficult relationship ahead.
Refuses Professional Advisors
Buyer refuses to involve lawyers or accountants. Indicates lack of seriousness or attempt to avoid proper legal protection.
How to Verify Legitimacy
For Buyers: Verify Seller
- Request direct access to App Store Connect/Play Console (read-only initially)
- Verify ownership through official channels
- Check seller's online presence and history
- Request references from previous transactions
- Verify financial claims with bank statements or payment processor data
- Use due diligence checklist thoroughly
For Sellers: Verify Buyer
- Request proof of funds (bank statement or letter from bank)
- Verify buyer's identity and business registration
- Check buyer's online presence and professional history
- Request references from previous acquisitions
- Ensure buyer signs NDA before sharing sensitive information
- Require escrow for payment protection
- Verify buyer has technical capability to maintain the app
What to Do If You See Red Flags
Ask Questions
Don't assume the worst immediately. Ask for clarification. Legitimate parties can usually explain concerns satisfactorily.
Request Verification
Ask for proof to address concerns. Legitimate parties can provide documentation. If they refuse or make excuses, that's a red flag itself.
Consult Professionals
If multiple red flags appear, consult with a lawyer or experienced broker. They can help assess risks and protect your interests.
Walk Away If Necessary
Trust your instincts. If something feels wrong, it probably is. It's better to walk away from a bad deal than to proceed and regret it. There are always other opportunities.