I don't think we are going to move forward with the other house in our neighborhood.
We met with our realtor, walked through our house and then walked through the other house. We crunched the numbers, the realtor crunched the numbers and we decided it wasn't worth it.
While the house has 4 majors things going for it that our house does not (2 car garage, master bath and 3 bedrooms on the main floor vs. our 2 bedrooms up/2 beds down, and lot location) it also had a few disadvantages- no lawn/grass area at all, electric baseboard heating system (not a heat pump- so super high heating bills in the winter,) lower quality hardwood floors that was bumping/buckling- all of which are changeable, but not at a low cost, the same as 3 of the 4 things our house does not have. Walking through the other house and really examining stuff was so helpful.
Re: house update- my post contribution