FHA loans are for people who do not have 20% to put down or who have poor credit or both. If you have good credit and 20% down you would naturally apply for a conventional loan.
Values are determined by the prices that similar homes in the neighborhood have sold for in the last three months. Ask a local agent that you like or have heard good things about to "run comps" for you on the house in question. They'll probably help you out because you might work with them in the future.