Carlos answered...

There is a passage from the Book of Mormon that can help us understand the doctrine of grace:

"And the way is prepared from the fall of man, and salvation is free... there is no flesh that can dwell in the presence of God, save it be through the merits, and mercy, and grace of the Holy Messiah... he shall make intercession for all the children of men; and they that believe in him shall be saved"

We fully belive in justification and reconciliation by grace - it is an essential doctrine of the Church, and is found repeatedly throughout the Bible and the Book of Mormon.
Anyone who believes in Christ shall be saved and inherit all that the Father has; however, we need to understand what it means to believe - we need to understand the word "believe" as Christ intended it to be understood.

The prophet Joseph Smith taught that faith is a principle of action. Yes, it's true that all we need to do to be saved is to believe, but believing isn't just a verbal declaration - true belief requires action.
Knowing that the world is full of breathable air isn't enough to live - we actually need to act on that knowledge and breathe in order to keep living. Likewise, having faith in Christ isn't just something that we say we have - we have to act on that belief. I can't honestly claim that I have faith in Christ and know that His path is the path to happiness if I'm not consistantly trying to gain that happiness.

We fully believe in salvation by grace, but it's possible to fall from grace if we lose our faith - and if we are not doing the things that Christ requires of us then we do not have true faith.
All we need to do to attain grace is to develop faith in Jesus Christ, but developing faith unto salvation in Jesus Christ is a lifetime endeavor which requires our absolute best sacrifice.