Make a list of the things you like about the house design you have a problem with and include it in the list of your needs and wants, and your site survey to a local architect to design a home with you.

My non-pro 2 cents: stay away from an open-to-below loft. Ours is useless (due to noise and smells from below) and it could be a problem with kids. And ours is even less open than your plan. Just a thought.

You could make a balcony of the overlook part, and have a wall with doors separating that from the loft. The balcony would be useless (as useless as the two-story space) but would look cool, the kids could have some fun with it, and the cat will use it as a perch. the loft will be 4’ smaller, but I’m not sure how you were planning to use it.

I agree the loft is problematic and of low utility, but walling it off from the great room would make the loft a windowless and dark place, and basically a depressing, large hallway which will inevitably start getting used for storage.

You're right, this is an impractical floor plan except for empty-nesters. In fact, it resembles mine. While my community is not technically over-55, in reality, everyone is over 55. I bet that's who this floorplan is intended for. I agree with Mark, take it to a real architect and get something that is really designed for you. I don't know why people balk at the cost. This is the largest expenditure you will ever make and for a little bit more (relative to the total cost) you can have something that really works for you.

IMO two story living rooms or great rooms are rarely appealing. The average person is less than 6' tall. Very high ceilings are not human scaled. A 9' ceiling is high enough. This is coming from someone who has a two story living room. :-) If you do have a very high ceiling the scale of the room dimensions need to be appropriate or else it doesn't look right. In my house they got it right, but I have a friend whose builder/designer didn't get it right. The room is actually uncomfortable to be in.

We have a 2 story great room, which I love, but ours is in the center of the house, not the side like your plan. When you walk into our home we have a 2-story foyer, stairs, and bridge hallway above, that leads straight back into the 2-story great room. So when you walk into our home you have a view all the way to the back of the home and there is lots of light. We have no loft, just a bridge hallway. I grew up in a home that had a loft area like you have in your plans and it was useless dead space. I would get rid of it and make the bedrooms larger or reconfigure for a 3rd bedroom.

We are moving into a home that had a 2 story living room. It was changed to a 1 story living room with an extra bedroom upstairs. I think it is a much ether use of the space.

The open to the floor below design is always problematic for noise heating and cooling and really just not good design.I also do not think 2 storey living spaces are great design since heating and cooling costs continue to rise why waste that money for no real reason . BTW you never want to go through a bathroom to a closet so fix that right now. Kids usually live in their bedrooms as they age so IMO bigger bedrooms are better than 2 storey great rooms for sure

When you have to start changing an internet poorly designed plan, then maybe it's time to instead sit down with an architect to create a house that will in fact work for you and your family.

What do you like about this poorly designed plan?

Here is my list again. Anything in bold needs to be rethought even before rethinking the two story loft that is just wasted space.

The best houses orient the public rooms towards the south for the best passive solar heating and cooling

The best houses are L, U, T, H, or I shaped.

The best houses are only one to two rooms deep. And covered lanai, porches, garages, etc count as rooms in this case.

The best houses make sure kitchens have natural light, meaning windows so one doesn't have to have lighting 24/7 to use the kitchen. (And no, dining areas with windows 10' or more from the kitchen will not allow for natural light.)

The best houses make sure all public rooms and bedrooms have windows on at least two walls.

The best houses do not if possible put mechanical rooms, pantries or closets on outside walls

The best houses do not have diagonal interior walls making for odd spaces.

The best houses keep public and private spaces separate.

The best houses do not have you walk through the work zone of the kitchen to bring laundry to the laundry room.

The best houses do not have the mudroom go through any of the work zones of the kitchen.

The best houses do not use the kitchen as a hallway to any other rooms.

The best houses do not put toilets or toilet rooms up against bedroom walls or dining areas.

The best houses do not have walk in closets too small to stand inside.

The best houses do not have roofs that are overly large, and dominate the exterior of the house.

The best houses do not have stick on exterior materials only on the front façade.

The best houses have an organizing “spine” so it’s easy to determine how to get from room to room in the house and what makes sense. Meaning they don’t have meandering circulation paths.

And added from Architectrunnerguy:

-The best houses enrich their owners souls.

-The best houses are timeless.

-The best houses incorporate the intangibles of good design.

-The best houses have strong organizational concepts.

-The best houses have owners who understand what good design is….and isn’t.

-The best houses are shaped in response to the Sun.

-The best houses have all its parts in good proportion to each other and to the whole.

-The best houses enhance the street.

-The best houses balance function, aesthetics and construction.

-The best houses recognize there are always design tradeoffs.

-The best houses break some “rules”.

-The best houses are a joy to live in.