According to HousingWire, Scott Cox has written a book exploring how major decisions in homebuilding often depend less on having the right answers and more on asking the right questions. Cox illustrates this point with a personal story about being hired by a builder to help find development deals that would allow the company to grow back to its former size after a difficult period.
Cox spent months searching for suitable projects, but the builder repeatedly rejected his recommendations. When Cox finally asked for clarification on what the builder was seeking, he realized the available deals simply did not meet the builder's unstated criteria. After careful consideration, Cox advised the builder that they should either pursue these modest deals or dramatically downsize the operation. The builder had an exceptional land position that could sustain years of smaller-scale development without requiring Cox's services.
Despite acknowledging that multiple trusted advisors had praised Cox's recommendation, the builder decided to pursue the downsizing strategy and ultimately let Cox go. The strategy proved sound, as the builder went on to build out the ranch property successfully with a smaller team. Cox later reflected on what he could have done differently and identified one critical oversight: he had never asked two fundamental questions before accepting the job.
The first question Cox should have asked was about the builder's actual risk tolerance and willingness to pursue growth. The builder was not prepared to take on personal guarantees for the deals Cox found, even though the builder had been willing to take such risks when first starting out. Cox missed the answer to this question when the builder casually mentioned how difficult his early career had been, which Cox mistakenly treated as a anecdote rather than as a warning sign.
The second question should have addressed whether they shared the same assumptions about market returns. Cox assumed they were working from the same perspective simply because they operated in the same market, but this alignment was never explicitly confirmed. Cox later encountered a similar situation when interviewing for a division president role at a public builder; this time he did ask about the CEO's assumptions regarding sustainable market returns. Finding that their expectations diverged significantly, Cox declined the position. Within a few years, that division was closed after underperforming.
Cox argues that expensive mistakes in the homebuilding industry are typically made not by those lacking knowledge, but by knowledgeable professionals who gather extensive data yet overlook the most critical underlying questions. Asking the right questions forces people to organize available information in ways that reveal what truly matters most, whereas vague questions merely produce information rather than actionable knowledge.
What I am seeing locally here in the Bay Area and East Bay is that this principle absolutely applies to how we approach growth and investment decisions. Whether it's a builder looking to expand their footprint in Fremont or a developer considering a new venture, clarity on risk appetite and market reality between all parties involved from the start saves enormous heartache down the road. Too many conversations focus on the deal details when they should first establish whether the people involved are actually pursuing the same vision.
