Apple Watch

Right, I misread the original post. I don’t see a big problem if you erased the data from the phone. The phone buyer will have to setup from scratch which means any pairing to your watch will be gone.

As far as the watch goes, you might get lucky. If you are setting up a new phone and restoring an iCloud backup during the phone setup there is a chance it will offer to link the watch to your replacement iPhone (It worked for me when I had to replace an iPhone which jumped into a dock without unpairing). Otherwise you will need to erase the watch before you can pair it to a new iPhone. That’s completely standard and expected, just a little more tedious than getting it from a backup.

The buyer may have to erase again using steps from If you forgot your Apple Watch passcode - Apple Support but that will not be a big problem. It is more important that you followed the advice to remove the device from your Apple ID so the watch is released from Activation Lock, see What to do before you sell, give away, or trade in your Apple Watch, or buy one from someone else - Apple Support - otherwise the buyer can never re-activate the watch. (If you missed this step you can still do it now so it is not a major disaster).