Owner Finance Offer ~ Negotiation Advice

[Veronica Brock]

I have property listed for sale in Tennessee, $76K.  It is improved land; there is no house. There is no mortgage.

I have just received a verbal offer requesting owner financing.  The offer is $72K with a $25K down payment, interest only payment.  They have asked for a Balloon in 4 years, but offer that they will likely pay it off in 1 year.  They want there to be no prepayment penalty. They volunteered a negotiable interest rate.

Does an "interest only payment" suggest they are agreeing to pay $25K in interest, no matter when they pay it off?  Or am I misunderstanding these terms? 

Does this sound like a fair offer, and/or what should I counter?  I have never sold property, and certainly have no experience with owner financing.

Advice?