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I assume the settlement you are giving up doesn't have a recruitment building.
Easiest way to trade a settlement with AI is giving them a settlement with more millitary buildings in it. Otherwise buying settlements with gold is stupid expensive.
So build millitary buildings in the settlement you want to give them basicly.
Long version: There's a cap on how much you can sway the AI's decisions. You can't just offer them a million gold and get any diplomacy request you want. If they don't want to trade, offering them more past a certain point doesn't matter. The same applies for relations; being friends versus super best friends forever doesn't matter if it's something they don't want to do.
Otherwise, they value cities extremely highly, particularly if they have certain buildings (economic/recruitment) or help them complete a province. If you're trying to trade them a city, this is good. But trying to buy one, it'll basically make it impossible to buy. Even undeveloped cities are valued highly by them.
Also, not 100% sure, but I *think* habitability doesn't matter. Also, there's little or no 'priority' system for particular cities or areas; they don't get a bonus even if it's a city they should reeeeeeeally want back.
Another one I'm not certain about is how it works for races with different build options. E.g. Wood Elves can only build basic Outposts in most cities. I'm not sure how they'd value say, a Level 3 City, and whether they 'know' it'll become an Outpost if you trade it to them.
You can trade just fine, as long as the settlements are roughly the same value (or the one the player offers is higher value). The tier of the settlement and the buildings in it matter, the computer highly values recruitment buildings and somewhat values economic buildings.
The computer only looks at the current value of both settlements, not what will happen to the settlement once handed over (like with WE outposts or WoC in locations without a fortress). The computer doesn't care about habitability in normal gameplay, so they also don't care about that when trading.
Most of the time when trading settlements you can hit the balance button and get a nice chunk of cash to go with it. But be careful with that, you can starve a computer faction of gold if you do that too often.
The computer always considers a settlement trade a gift, so it will make the receiving faction like you more (this also makes unlikely alliances possible, Vlad + Ungrim for example).
There are also situations when they won't trade a settlement no matter what, probably because it has a strategic importance for the AI I guess.
if you want to sell a settlement, build a single military building. the AI will give you everything they have to get that settlement.
this system is broken and should've been fixed 2 years ago. but CA is CA, what can you do.
But the main use of settlement trading is to get them to do something else like allying with your faction, declaring war on someone or anything where you miss some points.
Just fight your enemy, take their settlement and give it to someone else for money, help or just to make it harder for your enemy to take it back (they have to declare war on the faction you gave it to, if they want to take it back and get another enemy in the region).
1. The AI is very greedy when selling and buying Settlements. Its honestly better to take it by Force, take even more Cities by Force, then selling them one of the surplus cities for Peace and use the other surplus to buy you back into the Pacts you wanted or had prior.
Dont break a Pact thought it sucks in the long run. Plan ahead. I for example never grand Kislev any Pacts until im certain they didnt steal Ostmark or Ostland Settlements. If they did, we can discuss the Peace and Pacts after I took them back with my Military. Its so much more effective
2. The AI holds more Value to military buildings in the Cities and when the Cities complete Provinces. So if you want to increase the Worth fill all Spaces with Military and maybe sell them another City from that Province a turn prior for Cash, Friendship and so they get greedy for a full Province.
On the other hand the AI doesnt like Settlements it cant really use. They place very little value on Cities on red/bad Terrair for their Faction, when the City was raided or when its devoid of buildings. Sure weak Factions that like you take Everything off your Hands but even those pay 1000 max for these broken down Ruins
So yeah they dont take the Offer because you want to buy a Settlement mainly, not because you sell one. Trading Settlement for Settlement has never worked for me either with the AI. Overall its easier to take Cities you REALLY want by Force. Sell Cities you dont want for Money but dont plan to buy them, its not worth it usually. I LOVE the Settlement trades but I mainly use it to strenghten my Allies and fill my Warfunds.