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27297 Wetland Road Harrisburg, SD 57032



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Message to Homebuyers

Wow, what a crazy environment we were living in. We at Nielson Construction have never had to balance a moving market like this in over 20 years. Please understand we are doing the best we can to balance all of these moving prices and delays.

Before 2020 we were able to commit to a final closing date and purchase price on the day we signed a purchase agreement. We are not able to commit to closing date or final purchase price.

Closing Dates: We are not able to fully commit to a close date until 60 days prior to the close date. We will give you an estimated date but know that we will not confirm a close date until we are confident the home will be completed within 60 days.

Example: Estimated close date is 10-20-21. (We will contact you on 9-30-21 and let you know that your closing date will be 11-30-21.)  

Purchase Price: Your purchase price is established based on what the home would cost to build on that individual date we meet and sign the purchase agreement = “X”. Knowing that it takes months to build or finish a home we are offering the home at a price of “X” plus any increases in a weekly average of the:www.nasdaq.com/market-activity/commodities/lbs times $100.00 (+/-) per point upon the date of the 60 days prior to closing. (We feel this is the most transparent way to be fair to both parties.) No discount in the event the market lowers, as most of our costs are not reflected in real-time.

Example: On 4-15-21 Our sales staff meets with you and agrees to a purchase price of $300,000.00 based on the “Lumber Nasdaq” on that date which is $1,278.00/lb. We will contact you on 9-30-21 (60 days prior to close) to check to see what the “Lumber Nasdaq” is that day = $1,296.50. The weekly average would then be calculated 60 days before close based on $100/lb.

Appraisal: An appraisal is a value that 3rd party places on the property after evaluating the property and basing that value off of other comparable properties in the area. A bank is required to use the lower of the appraisal and/or the purchase price as the base price of the loan. Most often, the appraisal will come in higher than the purchase price, BUT with the quick price increase of materials and labor in our market, appraisers are not able to find comparable to justify the value, leaving the agreed purchase price to be higher than the appraisal. This causes a lot of stress at the end of the project for both the buyer and the seller. This also leaves the buyer with the responsibility of paying the full purchase price regardless of the loan amount.

Example: If we agreed to a purchase price of $300,000.00 and the buyer did not add an additional cost, but the “lumber Nasdaq” added $2,400.00 the final purchase price = $302,400.00. The appraisal comes in at $293,400.00 the buyer will need to come up with cash of $9,000.00 to pay the difference prior to closing.  

Selection revisions and/or Upgrades: With all of the above challenges there are very limited options to revising our current specs and very limited changes available after signing a purchase agreement. Any changes made after the signing add time to the closing date and add cost to the purchase price. Please understand that changes to the original agreement may require payment upon the date of a change request.

We apologize for even having to share the above information, but we pride ourselves on being upfront and clear with our clients. Please know that purchasing a new home can be fun and exciting and we look forward to making your Dream Home a reality! 

Nielson Construction

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