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We're negotiating with him because we're a sick pasty white nation without the guts to grit our teeth and sacrifice hostages so that we don't let the creeps go.
When a terrorist has a hostage, rule one: Hostage is expendable.
That's just the way it is. And teh way it has to be. It's called 'hardball', and America hasn't the guts for it. (Thank you Democrats!) And yes, before anyone asks, I would prefer to be dead in a hostage situation than to have them negotiate with the scumbags. We have to make it so that going after civilian workers, women, and children and taking hostages is a fatal tactical blunder.
But, thanks to the 60's flower power crowd and the tree huggers and PETA, we care more about endangered frogs and teh terrorists feelings than we actually care about eradicating the scumbags. It seems that America wants to hold hands with the scumbags and sing 'kumbaya.' Like that will work.

Talking heads on TV saying why would Sniper wait after 12 shootings to demand money.

Answer is Sniper made contact with FBI agents and they didn't find him credible 5 SHOOTINGS AGO per NEWs sources.

So maybe the demand for money (11 million dollars) might have been on the table after the first 7 shootings but FBI didn't get the fact they were talking to the sniper.