You set the sag by adjusting the spring preload
First you need to get each end clear of the ground (not necessarily both at the same time) to measure your completely unloaded position. Completely unloaded does not mean just with you not on it - the bikes own weight is already compressing the suspension somewhat. You need to have the wheel completely free of the ground in order to get the unloaded weight (you cannot lift the rear by the axle or any point on the swing arm, nor the front by a lift that goes under the fork legs)
With the suspension unloaded, pick any two convenient points to measure between, one a fixed point, the other on the 'moving' part.
(say bottom of the forks to the lower triple clamp for the front & say the top of swing-arm at the axle to vertically above it on the subframe somewhere - these are completely arbitrary as long as they are representive of the axle position to a fixed location somewhat vertically above it and you use the same references for each measurement)
Once you get your unloaded measurements you need to find the loaded numbers. You want to be in normal riding gear so you get true representation of your weight. Bike of course will now be completely on the ground.
While sitting on the bike, have a helper make measurements in the exact same locations.
The difference between the two is called 'sag'
For front you will want something like 30-35mm difference; for the rear you want about 25-30mm. If you have more than you will want to increase your pre-load; less, if back it off.
Here's a good set-up guide for you.
I'm not sure exactly what you are describing, but the front can 'chatter' under hard braking if your steering head bearings are improperly adjusted or shot.