Purchase opportunity for a "too small" single-family house at a "too high" price 120 sqm / 550K

Honestly,
leave it be.
You’re just getting yourself caught up in something just because you like the location.

You can also get houses like that in Southwest Berlin or Potsdam.
700-800k and you have to add another 200k just because the location is so great and you live among the upscale clientele and the international school is just around the corner.

If you don’t care about the money, then go for it.
Otherwise, in my opinion, there isn’t much to think about.

Does anyone perhaps have a few ideas on how to accommodate 2 children and a study in the floor plan (see first page post) (small bathroom downstairs, enlarge bathroom upstairs)...??

I don’t quite understand the problem. All the rooms you need are there, aren’t they? And 120 sqm is definitely enough for 4 people. Until a few years ago, that was still the standard size for families.

How important is having an "own" house to you and why do you want a house? I understand the garden, do you have other reasons?

Is the topic still current, did you buy it, ?

I would definitely buy something like that in my desired location with correspondingly limited supply. It offers enough rooms for the family and even has a basement. What more could you want? ;) The only thing you won’t be able to implement is such a huge open space combining kitchen, dining room, and living room in one large room, but not everyone wants or needs that. You can manage the rest.
With existing facade insulation, (current) gas heating, etc., you should even be able to manage with 150,000€ renovation costs.

Is the topic still current, did you buy it, ? I would definitely buy something like that in my desired location with correspondingly little supply. It offers enough rooms for the family and even has a basement. What more could you want? ;) Only such a huge open space with kitchen, dining room, and living room combined into one large room cannot be implemented, but not everyone wants or needs that. The rest can be managed. With already existing facade insulation, (current) gas heating, etc., you should even be able to manage with 150,000€ renovation costs.

The topic is still current, but we will not buy it. 2 main reasons Price: The seller (community of heirs) wants to get the maximum out of it. In addition, there are interested parties for demolition (investors) because of the location. We can (and really don’t want to) join that. Reason 2 Size: For us it was too cramped, there are certainly possibilities (which unfortunately also cost a lot of money). If it had about 20 sqm more, we would have made an offer. We are actively searching further :)

How important is an "own" house to you and why do you want a house? I understand the garden, do you have other reasons?

Not that important! Garden is great. We wouldn't want to buy property just anywhere. Suburbs or "village" are out of the question for us. In general, I want to lay a foundation, so that later I can provide children and possibly grandchildren with a comfortable situation :) That motivates me