Hi Paula, Short sales can be very complicated. The bank is pretty much in charge but doesn't really care to much at this point because they don't have possession. Every bank is different. The seller doesnt usually make any money on the deal so I would venture to say no they will not be paying any closing costs. I would recommend buying a bank owned verses and short sale. There are exceptions of course. If your asking price is close to what is owed there may be some negotiating room. Realtor fees are usually paid by the seller as well, up to 3% to the buyers agent. What ever you do dont get your hopes up to high and expect to wait. Some banks drag it out until the 6 months is almost up.
Best of luck!
PS-You should be working with an agent who knows how this works to avoid suprises or it may not close.