So...we now know why the short sale bank is saying they won't pay closing costs. Apparently, they told the listing agent from the very beginning that they would only pay closing costs if we used them as our lender. The listing agent just never provided this information. It's not in any of the documentation that we've received (which I read thoroughly before and have gone through again). The bank WILL NOT pay the closing costs so the title company is saying it will have to come out of the listing agent's commission. So...at this point our realtor is going to her broker and it's probably going to get ugly. I have no problem with this since the listing agent is the one who dropped the ball (yes, cold and heartless *** over here). DH feels a little bad but we both agree that we shouldn't have to come up with the money. Hopefully the woman owns up to her error and she/her broker agree to pay but I have a feeling it won't be that simple.
Edited: for clarity
Re: Closing Costs Update