There may be an alternative method that I have used to handle this. If you and the seller are unable to come to an agreement on how cancelation instructions are to be worded, then you are technically still in contract with that seller. Have your agent check to see if the selling agent has placed the home back on the market as an active listing. If they have, then your agent then can demand from the listing agent/broker that it be changed back to a pending status until escrow has actually been closed. This means the home will not be on the open market. Chances are the seller would rather forget about earnest money rather then keeping their home off the market. Especially since it is still declining.