4 bedrooms and 3 baths in a 2500 sf home sounds just right to me!

I agree. 3 baths isn't overkill, necessarily, for a 2500 sq ft home. Are you in a family neighborhood?
(my own home is now 2100sq ft 4bd, 3 baths on 2 floors... It feels just right).

Thanks for the responses. I'm feeling much better now about having the bathroom.

To answer kirkhall's question, yes, I am in a family neighborhood. Which, I'm assuming, is a point in my favor for keeping the bath.

I think it depends on the layout of your home and whether you need some of the previous MBath as storage or sq. footage in another room. My home is 3500 sq ft and I have 3 BR/1 office with 2 1/2 baths......which is more than enough.

I wouldn't hesitate to make the original MBath a 1/2 bath if it gave me needed space elsewhere.

I think that sounds like a good number of baths. My house is about 2600 sq ft with 3 bedrooms up with two full baths, master bedroom down with a full bath and a guest powder room near the living room.

I thought I should post my floor plan, just in case the layout makes a difference in your opinions.
The proposed master suite is at the top of the page. The former master bedroom is now Bedroom 3.

Yes. If you are in a family neighborhood and the bathrooms are in a good placement in the house, having that extra bath would be points in your favor, generally speaking.

I also agree with the comment above, that if storage is a greater issue or the placement isn't ideal (or doesn't make sense), then making it a 1/2 bath would also be something worth considering.

I think you can keep it or lose it, in that position. But, if it is already there, I'd just keep it there.

Yes, I agree with kirkhall.

It is too bad that you cannot have bedroom 3 and that bath together instead of split by the hall.
Diane