The princes come to Balaam and tell him what Balak has asked. Then, when Balaam goes to God, he leaves out some of what the princes said. After God gives His answer, Balaam reports back to the princes, this time leaving out some of what God said. Finally, when the men return to Balak, all they say is, "He is not coming."
So, we can see a great deal of deception going on, in which each party tries to slant the conversations to its advantage. The princes certainly do not want Balak angry at them because they failed in their mission, and Balaam did not want to tell the princes all that God had said to him because he wants them to come back with more money.
We cannot take this story at face value. This is what Balaam did for a living; this is how he made his money. He was a sorcerer for hire—for pay—and he is negotiating here. We have just read a sorcerer's negotiation for his hire.
The first thing Balaam did wrong (from our perspective) he did immediately: The princes waltz into his courtyard, saying, "Balak wants you to come and curse Israel for him." Balaam replies, "Oh. Let me think about that. In the meantime, why don't you stay the night? Here, I'll put you up and feed you." He probably entertained them—perhaps he performed parlor tricks for them. But, in such a situation, what should a Christian have done? What should just a good person have done? He should have said, "Go back to your master!" and not even listened to them.
The apostle John tells us what to do should anyone come to our house and wants us to do evil, to go against the Lord God:
If anyone comes to you and does not bring this doctrine, do not receive him into your house nor greet him; for he who greets him shares in his evil deeds. (II John 10-11)
Immediately, then, Balaam becomes complicit in the sins of Balak. He should have said, "No. I'm taking my shingle down. I will not curse Israel." But instead he says, "Why don't you stay the night? I'll see if God gives me guidance in this matter."
It is probable that he did not expect God to say a word to him. His words were merely a ploy to get the princes interested and drag the negotiation out. He was putting on his diviner's hat and doing a little acting here. "Oh, I can't make this decision on my own! I must consult the gods. Stay here overnight, and in the morning I will tell you if God has come to me in a dream or a vision to tell me what I can do!"
He was playing the charlatan with them because most of the time, a demon did not come to him and say, "Okay, go ahead and do this," or "Don't do that." Balaam probably manufactured most of his "visitations." However, if a demon did communicate with him and was behind his sorcery, it makes Balaam even more evil. At the very least, he was giving the princes his pitch.
God surprises him by actually answering him! He starts off by asking him, "Who are these men with you?" making the man explain himself, which Balaam does. Then, incredibly, Balaam makes his pitch to God! "God, let me curse them!" God responds emphatically, "No! No! No! You shall not go with them. You shall not curse them. I have blessed them."
In the morning, Balaam tells Balak's princes, "Go back to your land. The Lord refused to give me permission."
We can give Balaam credit for this: He actually does what God told him and sent them away with their diviner's fee in their hands. He made no money. However, we can read into this that he did it, not because of the fear of God, but because of the thought that, "Hey, maybe this will help the negotiations if I send them away, because they might come back, and bring a bigger bag of gold with them to try and convince me. If I play hard to get, and they really want me, I could make a killing."
We need to remember that all the authors who mention Balaam after this write about him being greedy for profit at Israel's expense. We must include this fact in our understanding of what was happening here. God obviously inspired it to be written several times in His Word that this was how Balaam worked. He was avariciously negotiating a higher fee.