Sellers must look out for their best interests from the very beginning and to me, that means right from the point of selecting an agent.
A seller who's home I showed last year ended up foreclosing when they likely could have sold through a short sale. I suggested this to the agent and offered to guide him through the process to help the seller. He was unsure about the process and his comfort level with this. It was obvious he would not sell the home for the high price listed. Nor would he attempt to guide his client through the short sale. This was very, very sad.
There IS a difference in agent skill and knowlege level. Everyone's expertise varies. For sellers who owe more than their home will sell for it is in their best interest to be guided through alternative options. Often the agent is the starting point for these conversations.
There are agents who specialize in high end properties, agents who specialize in investment properties, and agents who specialize in short sale transactions. What I would recommend to sellers who owe more than their home is worth is to find out who the short sale experts are in their region and call them. Interview more than one to learn as much as they can about the process and about the agent.