Carol, if I had your bungalow and wanted to improve it to sell, I would do what you want to do. I've done it before. The more important thing is the square metreage of the house. Four beds in a relatively small space limits marketability to just a family who "must" have the bedrooms regardless of the size. In my experience, a house is far more marketable (and valuable) if EVERYTHING works well .......... that is ...... good sized family living room (incorporating the kitchen), sitting room, good bathroom(s) ............. etc etc ............ all obvious stuff of course, but you'd be surprised at the number of people who cram a "modest" house with "bedrooms" while neglecting the basic stuff that makes a house desirable.
Number of bedrooms is not the only criterion, despite what the agents say.