I assume your sister and you own the property 50/50. Typically, you would sell her your 50% interest by her giving you a note and deed of trust. The deed of trust could include 100% of the property, but more typically it would only be for the 50% interest that you are selling her; it needs to be recorded. The promissory note should detail the payments to be made. When she pays off the note, you can give it and the deed of trust back to her. On that deed of trust there is typically printed a request for reconveyance, which you will need to sign and present to the trustee (typically a title company).
If you and your sister are on good terms, and you trust her, you can simply take an unsecured promissory note from her. That avoids the cost of recording the deed of trust and the reconveyance fee.
Answered on Mar 08th, 2014 at 4:47 PM