“Prepaids” are funds that must be paid in advance at closing, such as homeowner insurance premiums and real estate taxes. Only a buyer pays prepaids.
If you are a buyer getting a rebate, make sure you max out your prepaids as much as possible. Lenders limit them, but you may be able to pay up to a year’s worth of property taxes and homeowner’s insurance into escrow. This can be helpful if you need to consume a big rebate.
Then again, who gets a big rebate these days? A modest one at Redfin (for who knows how much longer), but the days of the Big Rebate are over.