If you do decide to take back paper, you can keep the mortgage or sell it. The secondary market works for individuals, too. The difference is that you will not be selling yours to Fannie Mae. You will sell to a company or individual investor that buys purchase money mortgages.
The smart thing to do is investigate the market before agreeing to take the mortgage. Your real estate agent should have a contact that invests in these mortgages. You can find investors in the newspaper or on the Internet, but a personal recommendation is usually better. By doing this, you can get an idea of the discount you will have to give.
The amount will depend on many factors, including rising or falling home prices. Do not expect the one or two points that apply to institutional lenders. You could have to discount your second mortgage by 50% or more. If you have the first mortgage for the majority of the purchase price, to sell it could require a 10%–30% discount. Again, there are many factors involved and you may have to give a much lower discount.