CityLiving: There's more to downsizing than meets the eye. Jane Suiter reports

Fancy moving to a smaller home and realising a lump of cash to do with what you will?

For thousands of older homeowners the idea of cashing-in on what seem like remarkably high property values is an enticing one.

Some simply want to use the money to top up a pension that has not received enough attention. Others want to give their children a nest egg while still others simply find the effort and money needed to run a large home too much. And of course there is always the lure of sunnier climes for all those who find the winters here a real drag.

Many estate agents say the same families call them back several times over a few years as talk turns to selling. "There is always a lot of talk but only a minority ever do it."

In theory, all you have to do is sell up, buy a bungalow or apartment locally and splurge the rest of the money whether on the retirement home of your dreams abroad, down the west or on a once-off holiday of a lifetime.

The Irish spent more money on property abroad than they did at home in 2004, with an estimated €2.5 billion invested overseas. Most of this was spent in the commercial market, but millions more were quietly used to buy homes and residential investments from Majorca to Marbella.

And older people spent a good deal of this rather than young twentysomethings priced out of the market here. On top of that there were 20,000 second homes bought here last year as people looked for a bolt hole away from the city.

But there are other good reasons to consider selling the family home. Paul Murgatroyd of Douglas Newman Good says many couples selling the family home use the cash to top up pensions or sometimes to gift money to their children, giving them an inheritance while they are still alive.

For many of these people a bungalow close to home is the ideal option. But, with half the city seemingly chasing the same properties, the values can be inflated while many old bungalows can also be real money pits, in need of rewiring and refurbishing. So for many an answer can be a modern townhouse or apartment which are far easier to upkeep.

On top of that just moving home costs money. A big chunk of the profits can be swallowed up with legal costs, auctioneering fees, advertising, stamp duty, removal charges, redecoration, refurbishment and furnishings.

It is important to think through all the pros and cons very carefully. Declan Cassidy from Gunne says there is a real fear factor at work. "There are many people living in €1.5 million-plus homes who cannot really afford the upkeep of the house or the garden, but they're worried about moving into an apartment and often want to keep the house for their children.

"Certainly, for those recently widowed, it is always sensible not to rush into any decision you may regret."

Remember that when you retire, your home is the real focus of your life and you will probably want amenities close by. If you move away you are leaving the familiar friends, neighbours, shops, church and facilities. If you buy a smaller, more manageable place locally it may mean saying goodbye to some well-loved piece of furniture.

But of course it all depends on what you want. Martin Gilmartin of Daphne L Kaye & Associates says many couples are shocked at the price of a new home.

He notes: "We see a lot of people who are living in large four or five-bedroom homes with large gardens. They want to sell up and buy a local bungalow or apartment. But the price is often a shock.

"They may sell for €1.5 million but find that between the bungalow and doing it up almost €1.1 million is gone. That leaves very little to either buy a place abroad or fund their retirement."

It may be slightly cheaper to opt for an apartment but, for many people used to a garden, life without a pruner in hand may not be relished.

However, the sums can add up for those who want to buy a small place in Dublin to return to while spending the bulk of the money on a villa abroad or down the country where prices are cheaper.

According to Michael Grehan of Sherry FitzGerald, selling your home is about the only way to realise a lump sum without incurring any tax liability. "It can be very hard to make the sums add up but, if they do, it can make a lot of sense."

Alternatively, some people sell the house but retain some of the land to build a smaller home or bungalow.

At the end of the day, you have to do the sums and make sure they work for you.