Recovery Mode But No Storage for Re-Install of BigSur

Here is an Apple article with instructions on how to prepare a Mac for sale (there are links for actually erasing the drive so pay close attention):

What to do before you sell, give away, or trade in your Mac - Apple Support

You need to erase the whole Container. Depending on the version of macOS, you may first need to delete one of the APFS volumes before being presented with the option to delete the hidden Container. You must at the very least delete or erase this hidden Container. On an Intel Mac you can erase the whole physical drive (don't erase the whole physical drive on an M1 Mac). If you have a 2018+ Mac with a T2 security chip, then you can "Restore" the firmware which will also reset the security enclave chip and perform a clean install of macOS, but this requires access to another Mac running macOS 10.15+:

Revive or restore an Intel-based Mac using Apple Configurator - Apple Support

Revive or restore a Mac with Apple silicon using Apple Configurator - Apple Support

Hi SonjaG,

Are you sure that you erased your Mac correctly? If you did, there should be plenty of space to reinstall macOS Big Sur.

To answer your question, if you didn't wipe your MacBook Air at all, it should start up normally. Otherwise, you'll see a blinking question mark, and will need to start up in macOS Recovery again.

Follow these steps to completely wipe your MacBook Air. You'll first need to start up from macOS Recovery:

• If your Mac has an Intel processor, hold down Command-R as you power on or restart your Mac.

• If you have a Mac with Apple silicon (M1 family or M2), shut down your Mac, then press and hold the power button (Touch ID) until Startup Options begins to load. Then, select Options and click Continue.

Once you're in macOS Recovery, follow these steps to completely erase your Mac:

1. If you're prompted for an administrator password, your Mac wasn't completely wiped. Skip to step 4.
2. When the list of utilities appears, go to the top of the screen and select Utilities -> Terminal.
3. Type "resetpassword" without the quotes and hit Enter (Return).
4. The Recovery Assistant should appear. Go to the top of the screen, and select Recovery Assistant -> Erase Mac.
5. Confirm the onscreen prompts to completely erase your Mac.
6. If your Mac has an Intel processor, it will need an Internet connection to download macOS Recovery from the Internet when it restarts. Connect to a Wi-Fi network when prompted, and wait for your Mac to launch macOS Recovery.
7. Your Mac should proceed straight to the list of utilities without prompting for an administrator password. Connect to a Wi-Fi network in the top right corner, then select Install macOS and follow the onscreen instructions.