Yes, that is how you recover money from someone who violates an agreement to pay you a sum--by suing her. You would sue for breach of contract, and would need to show, by credible testimony and/or documentation, that there was an agreement for her to buy the home for $7,000, that you gave her the title, but that she only gave you $6,200. For $800, suing in small claims court, acting as your own attorney ("pro se") is a good option.