Do not talk about selling links.
I have come across a large number of websites that openly advertise you can buy a link on their site. This is a big no-no. If you have an advertising page on your site, do not list anything about plain text paid links even if it is an option.
You DO NOT talk about selling links.
This rule is doubly important for off site advertising venues. Make your URL private within link networks. Most text link ad networks either by default, or as an option, allow you to hide your URL until after a link is purchased. Take advantage of this and if your network doesn’t have this option then you might consider switching.
Do not mark links as paid, sponsored, affiliate, or similar
Many link sellers openly advertise the fact their paid links are sponsored in one way or another. You might as well go outside to find the switch for Google to beat you with. Never, under any circumstances admit a naked text link is sponsored. That goes for link anywhere on your site, be it the sidebar, or in the middle of your content. Also don’t think because you used an image to disclose the links as sponsored you are safe. Humans are reviewing these sites, and they can read text on images just fine.
Never place paid links on your homepage.
Home page links are one big red flag in most cases. It is rare to have the available content on a homepage to place links anywhere other than the sidebar or footer of a site design. Refer to the next rule. Instead, sell links on your internal pages.
Never place paid links in the footer or sidebars of your website.
With few exceptions, placing paid links in the sidebar, header, or footer of your site design is going to get you noticed by the wrong people. Find a way to place the links within the actual content of your pages. If you don’t have any content with the exact anchor text the buyer is looking for, see if it’s possible to slip into an already existing page. If not, see next rule.
Create content related to each link
If you do not have any content directly related to what the link buyer’s site, create it. You should not be willing to accept advertising dollars from a site that isn’t up to your quality standards so that means you should be willing to discuss the exact topic of the advertiser in the form of content on your site.
Be willing to turn down inappropriate buyers.
If you are selling links on your website you are probably in this game to make a buck just like me. Unfortunately there will be times when you have to turn some down. If a potential advertiser is completely unrelated to your site or is of poor quality, you are better off rejecting the offer. Better to live another day to sell another link than risk your site to the wrath of the Cutts!
Rule of thumb
If the link appears any different than one you would normally give when discussing a random third party site, it can be flagged as paid and you can suffer. It’s not hard to sell links that are impossible to detect, you just have to stop being lazy.
Some website owners will have an ethical problem with selling links and not disclosing they are paid. To them I say then you should not be selling plain text links at all.