It's not uncommon at all for buyers to make offers that include some sort of seller contribution at closing.
This is done for a number of reasons. Sometimes buyers just need a little extra cash to help cover the closing costs or part of the down payment. Sometimes they have some improvements in mind and want to preserve their capital to pay for those projects.
Whatever the reason, as someone selling a house, what really matters is the net sale price.
As an example, if an offer is made for $205,000 with $5000 contribution to the buyers' closing costs, the way to think about the offer is that it's for $200,000. The property will have to appraise for at least $205,000 because the loan is going to be made based on a percentage of the purchase price. But the net sale price is $200,000.
During any negotiations, just keep that net sale price in mind. $202,000 with $2000 back to purchasers at closing is the same thing. So is $204,500 with $4500 back at closing. You can see where this is going.
Again, it's fairly common. Especially in times of low interest rates. Adding a little extra to the principal of a loan may seem worth it to protect a little additional cash for closing costs or improvements. It's essentially the same thing as borrowing some of the closing costs.
Talking this through with an experienced, professional local Realtor can be very helpful. Just call or email.