Take the sensible and longer term approach.
Kids have stuff, loads of it, I think it breeds. You need to have sufficent space for them, you and the stuff. You would probably get away with siblings of the same sex in one room, but it wouldnt be ideal in the longer term. Depending on the age gap they may have very different bed times, need different bed time routines, longer term they will want privacy, somewhere quiet to do homework etc.
No your house doesn't need to be perfect, I live in a wonky Victorian terrace, but I'm glad I decorated pretty much the whole house before arrival because it hasnt seen a paint brush in the last 6 years. Depends what you can live with I suppose, I'm not overly houseproud but after 6 years it is starting to look a bit of a mess and I am irritated by it. I would definitely do any big jobs like kitchens or bathrooms, simply because once you have kids you may not have the time, money or inclination to do them. Hallways take a lot of punishment from kids - give it a coat of paint to freshen it up, kids will fill it with coats, shoes, school bags, and mud and knock hell out of the paintwork with scooters and bikes soon enough.
I do have a downstairs loo, but I don't have an upstairs one.
Your home needs to be safe, so if you live on a busy road do you have suitable fencing and gates so that an escaping toddler can't rush out into traffic. If not, put them in.
Savings could be important depending on your adoption leave package. I had very generous adoption leave, 6 months full pay, 3 months half and 3 months no pay so I only needed enough savings to tide me over 3 months.