Cool!

So i didn't know very much about this game and i tried selling my armor which i just realized people cant wear because of it being customizable. I was selling it then he said he reported me, and i had NO idea that it couldn't be used
Now do i permanently lose my account

No. There is a slight chance you may be banned for a day or two.

I doubt you'll get banned for it.

At worse, it'll be like Savio said, a day or two suspension. But that's highly unlikely.

Welcome to guild wars. People will report you for nearly everything you say and do. It will rarely ever occur in a ban, unless you do something seriously wrong.

as long as you dont do a major bannable thing like bad name, selling accounts cheating etc you most likely wont get banned, and 100% sure it wont be a permanent ban no matter what.

Even though no one else can wear your armor - it is not a violation of the rules to sell it because......

1: they would be warned in the transaction that it is customized so there is no way to scam them

2: they could, conceivably, buy it to salvage

3: sometimes people will buy armor or hats from very well known players as mementos

In fact, the guy who reported you should be banned for abusing the report system

U shouldn't recieve a ban. In fact, you did nothing wrong, which is why I question the person who reported you.
Anet would be a joke if they suspended you.

I think that if someone actually SAYS they are reporting you, you can rest assured that they are far too lazy to actually do so.

It's the people you don't hear that will actually report you.

I wouldn't be too worried about this threat of reporting.

lol /report is funny.
ppl really will report you for pretty much anything, or at least say they will.
i can only imagine anet laughing at/ignoring all the fail /reports they get
edit: savio, im a ppl, r i stooped? ;(