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Hey man, I have never done a tele build but i have looked into doing one and have some info. Ebay is great for guitar parts, sometime you can get a body with electronics for a reasonable price. Guitar fetish has like $70 bodies, they are pre painted which is a plus but made out of some super light weight wood, some people say it has a great tone but warn the wood is so soft it is easy to strip screw holes. Necks are probably the most important aspect, at least to me. You can get a mighty mite neck for cheap but i would spend my money on a neck on ebay or even a warmoth. Also http://www.unofficialwarmoth.com/ great guitar builder site. Be careful, my main problem is i always wanted to go one step more expensive for my gear and the prices i was looking at were out of my league for a first build. Good luck and let us know how it goes.

yea you could do it under 500 and have a great tele if you patiently wait for good deals (on neck and body) to pop up on evilbay. i would suggest going with a quality body and neck using USA specs. it'll be a easier build as there are so many parts out there being made overseas these days that are off just a bit. there are also several guys cutting bodies to original specs going for cheap unfinished.
pine is harder to find cheaper but they're out there.

i do not like guitar fetish's bodies and necks. they are cheap for a reason. yes, they work but it's not a tight fit. i bought a replacement neck for one of their own guitars and it didn't fit , also needed a complete fret level and crown. not fun for the beginner and not worth the money considering all the work i had to do on it.

you should do it.

that pine body looks great. it'd be hard to beat that.
USA custom and guitar mill make top quality bodies and necks. but they can get pricey.
i'd go for that pine body....buy a really good neck for it.

you can get Fender pickups and hardware for bargain prices on eBay by deciding on a set percentage of retail and placing bids for no more than that amount. i got all the metal parts for my Tele, including a 60s reissue wiring harness ready to install, for 60% or less of what i'd have paid to Angela or some other parts seller. the tricky thing is finding a decent neck for cheap...Tele necks, especially maple-board ones, are dear compared to Strat necks.

TDPRI's DIY-ish forums might be very helpful on scrutinizing specific parts. Also some of the finishing info can be very helpful for keeping things on the cheap.

Buy everything on eBay. I built a bass that way and spent $90.

like i said, to find a good maple-board Tele neck on eBay for less than $100 you have to watch the listings like the Mossad. trust me, i've been doing off and on for the last two or three years. if you know people who have piles of parts, it might pay to ask them. if you like rosewood fingerboards, you're golden...rosewood-board Tele necks are a dime a dozen.