I would never use paypal to sell domain names unless you know the buyer is reputable person.
There is no recourse if buyer use hacked in paypal acct or request refund.
You will lose domain and NO money in your acct.
Use escrow sevice although escrow.com have some way to get scammed, it's still better than paypal.
Use Moniker escrow if your domain is at Moniker.
There is another new escrow service which only deal with domains.
It's at https://EscrowDNS.com/
I am not associated with above url in any way.
But, I do know owner from other domain related forum
and he is highly respected domainer.
As for transferring domains - I do not recommend this. It's better to push the domain to buyer's acct at same registrar after you got money.