Here’s a question for you that has been bugging me for years; why can’t home-builders follow the auto dealer’s classic model of old for new, and let people trade-in their old homes for new ones?

Currently, when you’re in the market for a brand new car, or a used car, you can take your old one along to the dealership and trade it in. Like most deals, there’s both an upside and a downside to this system.

The downside is that you’ll lose money on the car you trade in. You will always get more selling it yourself, but most people are willing to swap that cost for the convenience of an immediate trade-in.

On the upside, well, there’s a list of great advantages to this deal. First, the dealer gets a car for several thousand dollars less than its retail value. With some dollars invested in wholesale parts and detailing, the dealer will make a handsome profit. For the owner of the trade-in, the ability to drive into a dealership with one car and leave with another is golden. Plus, the dealer does all of the paperwork. And if you owe more than the car is worth, you can still trade it in and apply the negative equity to your new loan. Not ideal, but it still means you can get into a new car. Therefore, trading a car (the second largest purchase most of us make) has been made easy by the auto industry.

Now take a look at the largest purchase we will ever make: our home. If you walk into the office of a home builder and ask them if you can trade-in your old home for a new one, you’ll probably be laughed out of the building. But why?

Think of it in the same terms as the car trade-in for a second.

Put yourself in the position of thousands of homeowners in America right now (you may not have to, you could very well be one of them). These homeowners are in a house that has depreciated in value and are unable to sell it. It could be that they’re upside-down, or just don’t have enough equity to cover costs. But the state of the market means that they can afford to upgrade to a larger house. And as many people have outgrown their small homes and need to get into a larger property, the only thing holding them back is the dead weight of the old home. Plus, many people are trying to save for a new home, and making the upgrades to the old home to make it more saleable is just not possible.

In today’s market, it can take many months (or years) to sell a property. During that time, the homeowner has to keep the place looking spotless for potential buyers. And once it’s sold, there’s commission to pay and, unless the owners are very lucky, a storage unit to pay for while they search for a new home. Many families are left homeless, renting a property or living with relatives, while they search for a new home.

Now apply the “home trade-in” idea and see what happens. First, the home-builder appraises your old home and offers you a percentage of its value, say 90%-95%. For that, the home-builder will immediately take the old home off your hands once the new home is built. The advantages to the builder are huge. They do get an old house, but they pay below-market value for it. Using their resources, they could flip that house in weeks and resell it very quickly for a tidy profit. Even if they break even, they have still made money on the sale of the new home. And they will get hundreds of new buyers through the doors to purchase a home, which will stimulate sales and help get costly inventory of their backs.

For the homeowner, it’s a dream come true. They don’t have to worry about selling a home. They just walk into the home builder and trade it in, taking the loss for the convenience. If they’re upside-down on the home, that can be rolled into the cost of the new home. It may only be a few thousand dollars, but even if it’s $20-30,000, that equates to a small percentage of the new home’s price. The rough estimate is about $7 for every $1000 you finance, which makes an extra $140-$210 per month. The new homeowner doesn’t have to pay fees or commissions on selling the old home, that will all be taken care of by the home builder. And when the time comes to move in to the new home, they hand over the keys to the old home within a few days of moving out. They never have to be homeless or pay for storage, hotels or rental property.

Am I dumb in thinking this is a system that should be available nationwide? I’m sure I’ve oversimplified it, but it seems to me that this is something that could help millions of families, stimulate the housing market and, in effect, keep both home buyers and home builders very happy. If there are any representatives of the major home builders out there reading this, please weigh in. I’d love to know why such a positive system cannot be put in place. And if you can't think of a reason, maybe you should start offering this to customers...something tells me you'd sell a whole lot more homes.