This is what grace does:
My mother-in-law wrote on the back of her Christmas card to us a note, part of which said that she appreciated my strong spiritual leadership in the home during our recent trials with our children's health issues. This was such an encouraging thing for me to hear as you can imagine. You know what is most encouraging? My mother-in-law is in our home a lot and she sees me in the home a lot and thus she also sees that I act in ways that are not, let's just say, Christ-centered in the home - they're usually more me-centered. But in what she wrote she has done two things; she has not overlooked my sin (trust me, she sees very well) and, instead, she has chosen to see Christ at work in me. What a great example for me! And that's what grace does; it doesn't whitewash sin (that would not be grace), it is aware of the sin, but it has a greater awareness of the work of Christ.
Just imagine what our marriages would be like if we had eyes of grace instead of eyes of fault-finding! Imagine what our relationships with our children would be like if we were quicker to look for evidences of grace in them instead of all the ways they fail and disappoint us. You can go on and extend to all of your relationships. That's what is so amazing about God's grace to sinners. I fail Him daily in so many ways, but He sees Christ, whose righteousness I wear and with whom I am united. My sin is great, but His grace is greater and Christ has paid for all of my sin. God loves me and He is for me and He is satisfied with me and well-pleased with me.
And this is all of grace.
But God, being rich in mercy, because of the great love with which he loved us, even when we were dead in our trespasses, made us alive together with Christ— by grace you have been saved— and raised us up with him and seated us with him in the heavenly places in Christ Jesus, so that in the coming ages he might show the immeasurable riches of his grace in kindness toward us in Christ Jesus. ~ Ephesians 2:4-7