Whether I choose a paid or a free theme depends on the project. Either way the theme has to meet to my own quality standards. Standards are always subjective to some level so I will share mine here so it may help you pick a theme for a future project.
The best place to look for free themes is in the original WordPress repo. Dealing with free themes from other places on the internet can be tricky, especially if you don’t know the developer. So unless you want to go through the theme code yourself extensively, I recommend to stick to the repo. The themes on WordPress.org are always reviewed and thoroughly checked by the core team before it’s made available. Note that this isn’t always a guarantee that the theme is flawless, but it’s a good start. Also the code can be viewed in Trac so you can worry less about malicious content. Another perk is that the themes in the repo are 100% GPL or compatible.
I consider my time valuable so I need to get the information I’m after quickly. If there is no proper preview available for the theme, than it’s not likely I invest more time into researching it. A screenshot without a demo just won’t do. I like to see how the theme behaves in a live environment, I want to see the page structure, the typography, browse the rendered html source, resize etc.
Maintenance and support
I also check how the developer looks after the theme after it’s been released. When was the last time the theme was updated? How does the developer interact with reported support issues? When a theme is lacking updates and issues in the support section are being ignored by the developer, it won’t be my first choice unless I really like it. But then I would rather only use bits of it (mainly css) to build something similar myself, which is not something I would recommend to beginners.
Of course it’s ok for a theme developer to have a business model where the WordPress repo can contribute to his exposure. However not interacting in the community does not look good in my book.
I like to know the person or company behind the theme. How reputable is he or she? This seems a logical point of view but I’ve experienced often many people don’t check their resource. As mentioned maintenance and support say something, a quick background check on the supplier even paints a better picture. It shows you a little insight in who the developer is and what (issues) to expect.
What does his online footprint look like? How passionate about WordPress is he/she? Is he involved in other WordPress projects besides his own ones? Does he give back? How original is his work? Does he rate his own items? Has he been subject of controversy, for instance copyright infringement? If infringement is discussed you might want to reconsider using one of his themes. Same goes when someone is rating his own items.
Active installs & Rated reviews
I also pay attention to the amount of active installs and the reviews that’s been given on the themes. Although the active installs do not say everything, it’s one of the factors that I take into account along with the developers reputation in the WordPress ecosystem. Meaning an unknown developer with not a lot of installs over a longer amount of time may be a reason to pass on the theme.
One of te most interesting indicators are the reviews. Are there many reviews? Not so many active installs but lot’s of reviews indicate fake reviews, a good reason to pass on the theme for me. Are most reviewers anonymous and have only left one fantastic review for that particular theme? This is also an indicator the review is false. To be honest, I always go straight to the bad reviews because quite often these are the most helpful. Of course the person behind the review here is still relevant enough to be checked as well.