What the buyer is really offering you is the net you will receive after deducting the closing costs. That is the only figure you have to keep in mind, and know whether you are comfortable selling the home at that number. Keep in mind that the lender will limit the seller's concession to either 3 or 6%, and if the true costs are less than that, you get the money, they do not. It doesn't matter if they want to use the money for the actual title costs, or to buy down their rate. That is not really your concern, the amount you will end up with is the important thing for you.
When I speak to buyers about a seller's concession, I tell them to make the deal on the house first, then ask to add the seller's concession, rather than to offer a price and say "We want you to pay 'X' amount in closing costs." This way the seller is happy (relatively speaking) because they know up-front exactly what they are getting. Also, it is customary for the buyer to pay any transfer tax due on the seller's concession.