In a short sale the seller doesn't pay closing costs, the bank does. In your case it looks like the bank broke even. If they had accepted a lower offer they would have had to pay the attorney, The realtor and any state transfer fees, etc. and then taken less than what was owed to satisfy their own lien. You did not indicate whether there was a second mortgage on the property. If there was, then that lien also had to be satisfied out of the amount you paid. And, yes it is both normal and perfectly legal. Any bank is going to try to come as close to breaking even as they possibly can. In fact, they have a legal duty to their share holders and investors to do exactly that or to minimize their losses as much as possible.