I went into the watch app and clicked unpair, does this completely erase the watch back to factory settings for resale? Nothing said erase so wasn’t sure.
Yep, and that's how you proceed to do a clean install/factory reset. I'm not sure why Apple did this, because I had to re-pair my watch one time, because of an issue with my phone losing the pairing and so I had to wipe my watch ¯\_(ツ)_/¯