Here's something strange about negotiating a property price: almost nobody starts by saying what they're actually willing to do.

Seller wants $500,000. I might be willing to pay $470,000. So do I offer $470,000? Of course not. Maybe I offer $440,000 because I expect him to come down and he expects me to come up.

Everybody knows this. We call it negotiating. Or haggling. Or, if we want to sound sophisticated, "price discovery".

But there's a small problem. The seller is a human being. And I just told him that the thing he believes is worth $500,000 is worth $440,000 to me. I may think I'm opening a negotiation. He may think I just called him an idiot. That's where the textbook version of negotiating starts breaking down. Because nobody actually has one perfectly fixed number in his head. The seller may say $500,000. Maybe he'd happily take $475,000. Maybe he'd take $460,000 if I close quickly. Maybe he'd reject $480,000 from somebody he doesn't trust and accept $470,000 from somebody he likes who makes the transaction easy.

And I'm not much different. I tell myself $470,000 is my limit. Then we talk. I learn something about the property. He gives me something on timing. I realize the roof isn't as bad as I thought. Suddenly $475,000 doesn't seem insane. The price is being created while we're talking.

That's why I'm not convinced by the negotiating advice that says: "Make your offer. Then shut up. Never negotiate against yourself. Walk away." Sometimes that's exactly right. But sometimes the smartest thing I can do after the seller says no is ask: “Okay. What bothers you about my offer?”

Because perhaps it isn't the number. Maybe it's the closing date. Maybe he needs cash quickly. Maybe he doesn't want an inspection circus. Maybe he thinks I'm another investor throwing fifty lowball offers around town hoping somebody is desperate enough to bite.

Or maybe I simply pissed him off. That's real too. I've watched negotiations become impossible over amounts of money that were tiny compared with the deal because one side decided the other side was trying to screw them. Once that happens, arithmetic stops helping.

And there's an opposite mistake. Some buyers almost take pride in removing the human part: “Here's my number. Cash. Take it or leave it.” Efficient. Clean. Powerful. And occasionally a wonderful way to make somebody decide he'd rather sell to anyone except you.

People like doing business with people. They want to be heard. They want to explain why their property is worth what they think it's worth. They want to know who they're dealing with. Sometimes twenty minutes of conversation moves the price more than another $10,000 offer.

That doesn't mean I should be afraid to make a low offer. If my numbers say $440,000, they say $440,000. I'm not paying $480,000 to protect somebody's feelings. But there is a difference between saying: “Your property isn't worth what you're asking.” and: “Here's how I got to my number.”

Same offer. Completely different conversation. And maybe that's the real art of haggling. I need to leave enough distance between my first offer and my maximum to negotiate. The seller needs enough distance between his asking price and his minimum to negotiate. But somehow we also need to convince each other that the distance isn't disrespect. We're not enemies. We're two people trying to discover whether there's a number - and a set of terms - that makes both of us willing to say yes.

Sometimes there isn't. Then I leave my offer open and walk away. Maybe two weeks later the phone rings, as it did in this particular deal. But if it does, I don't think the lesson is simply: “See? Silence won.” Maybe the seller needed two weeks to discover that my insulting offer wasn't quite as insulting as it felt on Tuesday. And maybe I needed two weeks to discover that my absolute maximum wasn't quite as absolute either.

Because the final price isn't always hiding somewhere waiting for us to find it. Sometimes the conversation creates it. So perhaps the better question isn't: "How low should my first offer be?" It's: "How low can I go and still keep the other person talking to me?" That may be the number that actually starts the negotiation.