Depending on the college, net home equity could be assessed up to around 5% annually (in theory more, but that is the usual rate for fully assessable parental assets at CSS colleges). So a $50K miss would potentially throw off the NPC by up to $2500, but it could be less if they do not fully assess net home equity.
I personally think the most easily defensible estimate is one you pull from Zillow, Redfin, or similar. But if you have a decent reason to think they are overestimating, you can use your own comparables from recent sales in your market, or even pay for a professional estimate.