Mike, what kind of sights do you want?
Obviously the front sight goes at the muzzle end, but the rear sight can be at the rear of the barrel, or at the back of the receiver (see
Dedicatedshooter's recent conversion to
Trijicon Ghost Rings for a very nice installation).
The advantage of the barrel mounted rear sight is you don't dedicate the gun the rifle-type sight operation. A simple barrel change and you can be shooting birds or clays with a vent rib barrel. The advantage of the receiver mounted rear sight is most folks shoot better with a "peep" sight; but, you'll have dedicated the gun to that type of sight and lose versatility.
With the 870, and other removable barrel guns, there is some motion between the receiver and the barrel -- this doesn't help rifle-style accuracy. It's one reason cantilever scope mounts are popular. By placing the rear sight on the receiver, you may lose some accuracy. It becomes a trade-off between accuracy and the benefits of a greater sighting radius. The decision is yours.
Check out Brownells, or other gun parts sites, to get an idea of what's available and the price range. If you can't drill and tap or solder for sight mounts, you'll also have to figure on installation costs.
Of course, there's the bigger question, do you really need a rear sight? Are you building a HD or slug gun?