"Halve the offer and start negotiating under that number" is quite a common approach to transactions involving rarely traded items. Your counter party is signal

"Halve the offer and start negotiating under that number" is quite a common approach to transactions involving rarely traded items. Your counter party is signalling you that he never dealt with a software developer before. You are a rarely traded item to him and he's trying to twist your arm. Working with people who don't know about software and appreciate the effort that goes into it is never a good idea.