Purchase of a small settlement house from the 50s

Hello everyone,
my partner and I currently have the opportunity to buy a small settlement house, but we are very uncertain due to the current interest rate situation and the specific offer. The house dates from the late 1950s and was partially renovated about 15 years ago (new and insulated roof, facade and basement as well, new windows), so initially we would only need to take care of a few cosmetic things (however, there is still a 20-year-old oil heating system installed). Since the house will become too small for us in the medium term and we would need to extend it, we are unsure whether buying it makes sense at all. Additionally, the really small living area of just 80 sqm means it would still work with one child for now.... One advantage is the nicely matured plot of around 700 sqm.

We are now faced with the question of whether we should buy the house and possibly extend it in a few years or rent it out then and move to a larger home, or whether we should rather keep looking. We have concerns that the house would already be too small with children after just a few years, but at the same time, against the background of the current interest rate developments, we might miss one of the few realistic opportunities. The interest rate offered to us would be 4.32% for 15 years.

What do you think? Looking forward to ideas and feedback.

That is very difficult to judge from a distance without precise information about the house. What is the location? (A or B city or the farthest countryside with less promising future prospects). In the latter mentioned rural districts with poor infrastructure (car-dependent, few good jobs), which are > 1 hour away from the nearest major city, prices will probably only go in one direction in the future, namely downwards. In a few years, you will likely get only a fraction of the current price for a poorly insulated house, since the real estate bubble has currently burst, but some still demand prices from a year ago (up to 70% too high!). Now with the high interest rates, demand will collapse…. So you will have more selection in the future as well. But if you are in an A or B city or in the commuter belt (<45 km to the city center), prices are more likely to hold up, even if they also fall there in the next few years (but not as much and definitely not for sought-after locations!). And finally, the crucial question: How is the house laid out? 80m2 sounds very small at first (especially for a family), but it also strongly depends on the floor plan whether the house is recommendable.

The house is located in a small town, about an hour from an A-city. On site, there are all shops and infrastructure for daily needs including all schools etc. About 1/3 of the purchase price is attributed to the land value and the other 2/3 to the house. The house is really small and would probably (still) be manageable with a primary school child. On the ground floor, there would only be the somewhat larger living room and the kitchen. The attic is severely restricted by the slopes, really very small without the additional installation of dormers.

What is it supposed to cost? And do you have a floor plan?

Am I blind or was the price nowhere to be found yet?

You wrote "too small" or "very small" about 5-6 times in both posts combined. Do you really think that the living space will be enough for you for a while? To me, it somehow doesn’t sound like it.
It rather seems like there is some panic about missing the chance.

If you are unsure, I would wait. Currently, we have the unfavorable situation that both interest rates AND property prices are high. In the long run, one of the two screws will have to move again. At the moment, globally it is a very uncertain time, accordingly there is risk everywhere, with interest rates and prices.

The house is supposed to cost 275,000 (without realtor).

Yes, the fear of missing out or coming too late is definitely an issue. The thing is, we have been searching for almost two years and now for the first time were able to view a house that we basically like, so some kind of realistic prospect is opening up.

In the long run, the living space is definitely too small. For our current situation, it would be okay, but prospectively, meaning in the next 5-7 years, we would definitely reach our limits.

I will look for the floor plan.