As the real estate market continues to struggle toward recovery, a persistent increase in foreclosures remains a drag on home prices. But a new study from real estate Web site Zillow finds that in most markets, foreclosed homes and non-foreclosed homes constitute two entirely separate markets with foreclosed homes typically selling for at least 20% less than non-foreclosures.

The "foreclosure discount" is greatest in areas with the fewest foreclosures. So, for instance, in Pittsburgh, where only 10% of home sales are foreclosures, purchasers pay 59% less for a foreclosure than a traditional resale. In Sacramento, on the other hand, where 50% of home sales represent foreclosures, purchasers only get a 19% discount for buying a foreclosed home.

The study may be good news for home buyers looking to nab a bargain by purchasing a foreclosure, but it's a mixed bag for sellers. They can take heart that they'll probably be able to sell their home for more than the abandoned foreclosure down the block, but they can't guarantee that the appraiser will agree. Realtors throughout the country report that appraisers who take distressed property sales into account often come back with prices so low that they scuttle a deal.

So what's a seller to do? Set your home apart from rundown foreclosures with easy cosmetic fixes like a neat lawn and a fresh coat of paint. And make sure to stress your ability to close a deal fast and be creative with negotiations; banks swamped selling foreclosures can't do either of those things. As for that appraisal, here are a few tips on getting a fair value.

Personal finance from around the web:

• Visualizing how much of your work time goes towards earning the money to repay your debts — think your car loan or your home mortgage — can be depressing. Nonetheless, here is a quick and entertaining way to do it (until you get to the depressing part). [Steadfast Finances]

• In a reversal of fortune over the past few decades, married men are now better off than their single peers. Who's to thank? Their wives, of course. [It's Your Money]

• Of all the forms you want to fill out correctly, your child's FAFSA — the key to getting college financial aid — is probably high on the list.  Here are nine mistakes you must avoid on your application. [The College Solution]

• Want to get your financial life in order? Just think about where you want to be in five years. [The Simple Dollar]

• Foreclosure stinks! A Texas homeowner sues Bank of America, alleging that BofA's agents, mistakenly foreclosing on the wrong house, cut the electricity to his home (which he owns free and clear). Seventy-five pounds of fish in the basement freezer, he says, went bad. Very bad. [The Galveston County Daily News, via Housing Doom]

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Personal finance from around the Web:

• In today's real estate market, unsurprisingly, some sellers are stretching — or hiding — the truth about their home's pluses and minuses. Check out this guide to the lies that a potential homebuyer will most commonly hear. [The Wall Street Journal]

• "Tax" really is a dirty word. A new study by Columbia University found that Republican and Independent participants would support a surcharge labeled a "carbon offset" but not an identical charge labeled a "carbon tax." Democrats support it either way. [Mother Jones]

• Banks seem to be looking for excuses to deny home loan modifications. And some violate the rules of the Treasury Department's loan modification program. [ProPublica]

• You may already know that you can use social media to save money, but ex-New York Governor Eliot Spitzer thinks you might also be able to use it to be a more powerful shareholder. [Consumerism Commentary, Slate]

• Start filling out that 2010 calendar with financial to-dos. Here's a month-by-month guide to get you started. [Morningstar]

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