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I'd suggest sod over seed. Sod is cheap and it looks good pretty quick. With seed, it'll take forever to get a good, thick stand of grass, maybe more than one growing season. Plus, you'll need to be more careful with it than sod while it's getting established.
Get a bunch of soil samples analyzed to get the soil pH right.
I wouldn't own grass without a sprinkler system but it will cost you a fair amount to install one, done right.
JR
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