I don't sell on the bay, but my wife does (I just don't want to tie my bank account to PP - she has a special account for that).
If you're going to sell, as others said, be honest. My only issues with eBay purchases has been non-disclosure of condition. Case in point: a train guy buys a bunch of stuff either at a garage sale or from another collector. Then sells them on the bay without really understanding what they're selling. I've purchased a few Atlas O switches on auction, from different sellers. I've had 3 that were listed as NEW, and even stated in the description as NEW, that were in fact used. Could immediately tell - things like the screws being installed in the switch motor & controller, the plastic ramp being installed in the frog, center rail oxidation worn down, etc.
Before I left negative feedback, I took pictures of the "offenses", sent to the seller, and explained the issue. In every case, they knocked down the price a bit and gave partial refund. Since they worked electrically, I was a happy camper. Every time, though, the response from the seller basically said, "Well, THEY told me it was new and I didn't know, since I'm not a train person" etc.
I'm just saying, if it's untested, say so. If it's new, make sure it's new.