One issue you might come across is that the garage steps down from the house and the ceilings aren't as high as the house.
Ron

it is fairly common here. you just leave the stepdown in place and incorporate it in your design.

Check that your zoning permits this.

Not that some people don't go ahead anyway. In one area I lived in, a neighbour converted his two-car garage into a family room with a wall of glass to the rear. From the front, there was no change. Double garage doors and all. Odder yet, the only entry to the garage was from the basement. The first time I was invited over I felt like Alice in Wonderland. Where did this mysterious new room come from?

You might want to check to see if your garage slab has a slope. Out here they are required to slope with the exterior walls sitting on a level stemwall or curb.

Years ago, my parents converted their garage into a first floor master suite and then added on a 2-car garage. I think they must have raised the height of the floor with a built up sub-floor because there is no height change from the family room to the BR plus the floors aren't cold in there like when there is carpet over a concrete slab. In upstate NY you can feel concrete cold in the dead of winter through even a thick rug pad.

I am just completely a project where I turned my garage into a dining/family room. Honestly the space did not work well for us as a garage it was only 20x20 exterior dimension, so not a lot of room, the car doors would hit the walls when you opened them. It was not a huge undertaking. We started just before Christmas and are just about done, this also includes a complete kitchen remodel.

The space works so much better as a room and completely changes the flow of our first floor. Next month I am going to build a deck off this new space as well. We do have a step down, but it was by design to have higher ceilings. With 3 windows and 2 full light doors its very bright in the room. Some pics can be seen with the link below.

Here is a link that might be useful: Garage remodel.

Thank you everyone for your replies, I think everything that you have mentioned, is going to work out.
The cieling height in the garage is the same as the interior cieling. We were planning on building a sub floor to raise the floor level to match interior floor, so the slope should not matter. And we are planning on knocking out the walls between the house and garage to open the floor plan up so I am hoping that it will all flow.
Marjen, I am so happy to see your garage remodel! I saw some of your pictures on the kitchen forum last night but I had no idea it was a garge remodel (that is a compliment for you) Can you tell me anything about your remodel that might help us on our journey? we are just starting the design process. I really like how your floors step down but do you find your floors cold being directly on the concrete slab? Did you add any special vapor barrier over the garage floor? and did you run into any trouble building the wall where the garage doors were?
Thanks for your help!

Well the floors are not on the slab. We actually raised it up about 4-5 inches and built a wood frame, insulated with R-19 between the joists then 3/4 t&g plywood on that. So its really not cold at all.

The wall where the garage doors was not much of an issue. I did decide to put 4" cement "wall" below the framing because the slope comes towards the house. I am facing it will 1 ft high of stone as well on the outside just to help keep water out and I think it looks nice :)