I'd go for #2

More cub appeal.

Smaller yard = less yardwork

Front porch, back porch

Nearby Park

Cul-de-sac street, cuts down on thru traffic

City Sewer, city water.

House #2 looks like it would take much less work to tailor it to your tastes.

While house #1 has more property, it looks like it would need much more work. Carpet has to go, walls need to be painted. The realtor uses more creative wording like "outbuilding" to describe a storage shed, which just turns me off.

What also turns me off about property 1 is the septic tank and well water. Both of these require more maintenance than a city water & sewer hook-up. Rupture a septic tank and you got an expensive mess on your hands. Well water needs to be filtered and sometimes tastes funky. Also, if you have a power black out, your well pump won't run = no running water.