I think the things to consider are whether the place is well built and designed for the price and location. Considering the housing trends, some analysts are predicting smaller homes are going to be in high demand, so if you ever did need to move, you would hopefully be able to sell at a fair to good price. If it is in a good neighborhood, great for your budget, and well designed, then you probably have a winner.
Split levels, depending on the design can make a small home feel roomier than it is. They usually have vaulted ceilings in the portion of the house that is one level. If it is laid out well, it can be very nice. You will however, definitely have to learn to live light where storage and having "things" is concerned. Y ou really learn to weed through stuff well, and it is a great deterent if you are a spend thrift who buys too much! LOL. But do you really need alot of stuff to live well anyway?
Things that make a smaller home with limited storage bearable:
A finished basement in addition to the main living and dining area is a must.
Purchase furniture and appliances that are multifunctional and small.
Bunk beds can maximize space in children's rooms.
If you don't have one, look into adding a 4-seasons porch to the home. It will give you much added space for entertaining and more.
Make sure the yard is well landscaped and can provide you the flexibility to add a screened gazebo or places to entertain guests during warm weather months.
A heated garage can be additional space if need be. I've known people who have used their garages for extra spaces to entertain when they have large dinner parties. They just rolled out a nice indoor/outdoor carpet, put up tables and voila, a nice extra room for family holidays during cold months.
If your yard allows, consider building an insulated storage shed or garden house in the back yard and keep alot things stored there.
Purchase put-together storage cabinets and closets: You can buy these California closet type storage systems at IKEA, Target, or your local hardware store. If you don't have enough closets, these can help.
Small scale furniture and keep furniture to only the basics to save on space: So much furniture today is designed for McMansions. I highly recommend checking out stores with the small home in mind. You will find creative storage ideas that will make living very doable in a small house at stores like IKEA (www.ikea.com). We recently bought a wall desk for the kids to do their homework. Opened it's a normal desk...closed it is flat against the wall and looks like a built in shelf. We have a sectional couch from there in our den that triples as storage (the chaise opens and you can store alot inside!) the couch portion opens into a double bed, and closed it's a fantastic sectional that seats up to 5 people, but it fits in a corner taking up little space. You get the idea. They have tons of stuff like this and more. If you don't have a store near you, you can order from their catalogue or online. They're very affordable too.
Furniture that folds up and can be put away when not in use is great for a smaller home.