Assuming a single family home is the property in question, you will need to employ the technique of examining past recent sale of comparable properties nearby. Anything older than six months (as a sale) will not be a reliable source of information as the marked could very well have changed. You must look at the price per square foot, and the absolute price that the properties were sold for. If you are able to find homes of similar size and stature and quality close by, the amount of the loan should still be significantly lower Thant the typical selling price of comparable homes. Even in dollars per square foot of property (living space) and in absolute dollars.
For a 2,000 square foot house on which you lend $200,000 (this equates to $100/ sq. ft.), similar homes should be selling for closer to $300,000 or more- about $150 per square foot, or more. This creates the all-important margin of safety in a big way should the market experience a drop in value during the life of the loan.