I would pay extra for the balcony also.   It's cheaper to have the builder do it than pay for it later.

I would enlarge it and put stairs down to the yard but that is probably against HOA rules.

I totally agree with that.   I don't see why that would be against HOA.  My dog loves to go up the stairs and hang out on the balcony.  

It depends the construction of the balcony but it can also give you a nice covered patio downstairs.  Install a ceiling fan and some tropical furniture and you have a nice outdoor retreat where you can relax, read a book or surf the Net.