Rajesh, the additional info you have provided sheds new light on your situation:
"Also, the one with smaller backyard has a bedroom downstairs and the one with larger backyard doesn't and the rooms are much smaller. "
If you have an elder family member that will be living with you a downstairs bedroom would be ideal so they do not have to traverse stairs. As far as the "bedroom size versus backyard size", this is again a personal choice based on what you have seen, an individual's needs as far as bedroom size is also personal.
"Another tough part is that I will have to rent it as I cannot move immediately since I currently rent in Cupertino and my children go to the best schools here and I will take 6-8 months to move to San Ramon."
With the current condition of the local economy, and the resulting state of the housing market, I would NOT buy now if you have a 6-8 month timeline for moving (a lot can happen in 6-8 mos time). Instead, I would suggest saving the cash you would have expended, avoiding the stress and hassle of finding/managing tenants, and using the next 6-8 months objectively studying where you definitively want to live.