I didn't build this staircase and the extensions aren't the way I would do them but this will give you and idea how to offset your rail, also here is a picture of the fitting you will need. Check to see what code is for spacing the balusters in your area, most places is 4 inch. To install the balusters drill your holes plumb, put top of the baluster in first, lift up, then put bottom of the baluster over the bottom hole, and slide down into the hole. You can use iron or wood baluster.
If you plan to use the existing post for the Newel you may have to have another newel post on the first step also, it looks like two steps are past the post now.
If you plan to use the existing post for the Newel you may have to have another newel post on the first step also, it looks like two steps are past the post now.
