When to buy a different house vs. do an addition : RealEstate

I own a very cute Cape Cod in CT with Long Island Sound views. I paid $176,000 for it; it’s a two bed, one bath, with 2-car garage. It is about 1,000 square feet. I have owned it for a year and a half.

I recently was diagnosed with a degenerative connective tissue disease, and will eventually be unable to navigate my own home, due to the stairs.

I have two options:

1. Sell my house and buy a ranch-style home. I have found a 3-bedroom, 2-bath house priced at $215,000. It is 1,600 square feet. I think I could get it down to $207,000.

2. Build an addition on my house (IF I can get a variance for how far my house has to be from the street) with a master bedroom and bathroom. In my area, I think I can do this addition for $50-60k, but would prefer to do it for closer to $40k where possible, assuming I can do things like paint, floors, and trim work.

My questions are:

Is it wise to do an addition instead of buying?

How can I navigate the purchase of a home while also selling my own? I cannot pay two mortgages at once.

Do additions have good ROI?

How much does it generally cost to SELL a house? I am low on liquid cash (thanks, health).

What kind of loan would work for either the addition or the purchase? I have little equity in my home due to short-term ownership, and this would be my second house purchase.

Thank you so much in advance for any help you can provide!