Good example: Domain is already owned, but the owner is in the business of buying and selling domains (you can usually tell these domains because when you visit them, they redirect to sales/contact-us page). I make an offer, he counter-offers, we're good.
Another good example: Domain is already owned and listed on a marketplace like Sedo.com. I purchase for the buy-it-now price, sedo takes care of the escrow and name-transfer, we're good.
Bad example: Domain is owned by some random person who bought it years ago and isn't really sure what it's worth. I check the Whois listing and email the contact address there. I might hear nothing back at all. If I do, I make an offer, their counter-offer might be an order-of-magnitude higher, or they're not interested in selling at all. Nothing you can really do in that situation.
Another bad example: The domain has not been renewed by its original owner, several folks have tried to backorder it, so the registrar puts it up for auction. This is worst case scenario. There is no option for tactful negotiation, just unbridled bidding against everyone else who wants the domain. I've never come close to winning such an auction, and I've tried several times.
Buying already occupied domains is always a huge hassle. No two ways about it, and a lot of the sites which sell/resell them are scummy as heck. I try and stay away from that as a general rule.
I am most curious about complex domain name purchases and the experiences people have had - things that work and things that have not worked.
More recently I purchased a .com for £7.5k for a new startup and the general consensus is the domain is worth a lot more than I paid for it - I have already had three speculative offers but I'm keeping it :) I also purchased the .co.uk for a very low price from the original owner who replied immediately and was very pleasant.
I tend to use an alias or third-party to purchase the .co.uk/TLD if I already own the .com as the seller will often bump the price.
I've had a couple of bad experiences, for example trying to purchase nihil.com and the seller wanted $65k – which it isn't worth imo, this was five years ago. I enquired again using a different alias a few months ago and they're now asking for $132k – meh.
There are some obvious techniques to not over paying, but all in all, it's timing and luck I feel.