I've never changed one in the e36, but they're usually straightforward.
You could splice a pipe in place of the valve to test it, but I'd see if it was working while the coolant was draining. Plug it in, turn the heater valve and see if it's moving at all. The ETM might have some info too.
Don't worry about bleeding the coolant before the swap. Bleed the heck out of it later.
The core is OK if you don't smell coolant inside the cabin.
I'd consider used parts if I could confirm that they work. This part does seem to have a definite lifespan, so it's a gamble. They won't take parts back either. If you go to a pick-n-pull you can even practice the job first, before doing it to your car.