Look at the property as if it did not have a price tag. What do you think it is worth? Typically, if a buyer and seller both do this, the buyer comes up w/ a lower number and the seller comes up w/ the higher number
Each seller will make his or her decisions independently. It certainly is more common for sellers to cut prices and offer concessions. There are still some sellers who simply are only willing to sell if and when it fits their price and terms. There is not a blanket motivation level that applies to all sellers.
Look at comps, market trends, current inventory, absorption rates, average list/sell ratios (be careful here becaue it is not always what it initially seems), and how does the property of interst stack up? A motivated seller may have priced under market. In today's market, a buyer could pay over list and still be getting a fantastic deal if the seller priced under market to sell fast.
Mortgage companies may pay closer attention to concessions, particularly on lower down payments. The property must still appraise. If a mortgage company, via appraisal, sees the value at the offer price less the concessions of closing costs paid, etc., the underwriter will factor that into the approval process.