DENVER -- It is a last resort for Denver homeowners hit with financial hardship; foreclosure. The decision is often difficult damaging. But are homeowners overlooking other options?

“The numbers tell us the vast majority of owners are just walking away, and are not aware of a foreclosure alternative that could save their credit and their piece of mind,” said Stephanie Fix, a realtor from RE/MAX.

Fix explained in Denver County, only 3 percent of homeowners sold their property through a short sale in the second quarter of 2009. Fix compiled the short sale information based on data recently released by Metrolist.

A short sale allows a property to sell for less than what is owed to the bank. The lender agrees to the lower price and, in some cases, will forgive the remaining debt.

Fix added short sales don’t have to haunt homeowners for as long as foreclosures. “A homeowner who goes through a successful short sale can, in many cases, be eligible for another home loan in two years. A foreclosure can stay on your credit for up to seven years.”

“The financial consequences are typically less damaging to a homeowner with a short sale than a foreclosure and bankruptcy,” said Fix.

Banks stand to benefit too. “It is stated that banks lose 40 percent (with foreclosures) versus a lesser amount of 19 percent if a short sale is successful," Fix told 7NEWS.

Still, the short sale process often isn’t short. Transactions can take months to complete, although Fix recalled a recent sale that closed in 30 days.

According to the latest figures, the average sales price for a short sale was $218,477, and sat on the market for 168 days. Douglas County had both the highest sold price and longest days on market.

With short sales potentially a better route for all parties, why are so few home owners seeking them out?

Fix said the answers include lack of public awareness and some frustration.

“I believe that as (real estate) agents we need to do a better job in the process as well to alleviate the frustration. However, the bank also needs to work more efficiently with the real estate community. The frustration occurs between the seller, buyer, buyer’s agent and the listing agent,” she said.

The tide may be changing though. Fix explained the federal government is expected to announce a new, streamlined policy that will make it easier to navigate and complete short sales.

In the meantime, Fix reminded sellers to trust an experienced Realtor when you need one most.

“I have lots of sad stories of clients who really needed my assistance. A short sale, if done right, is more gratifying to me than a challenge,” she said.