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What Smells? It’s Your Real Estate Transaction

by | Jun 16, 2023

The smell of the house you’re listing for sale can bring you significant profits. This sounds insane, but recent research suggests that smell has a much stronger connection to the hippocampus (the part of your brain focused on learning and memory) than all other senses. As a result, scent has a uniquely powerful, deeply rooted connection to your memories and, therefore, to your past. This is philosophically and psychologically fascinating, and raises the essential human question, “How can I profit from this?” If this was indeed the first thing that came to your mind, I’m terrified of you, but you are reading the right article.

You have likely experienced the uncontrollable resurfacing of certain memories when you encounter a particular, familiar smell. According to a 2021 study, the connection between the hippocampus and other senses became weaker as mammals evolved, but the strong connection between scent and the hippocampus has barely changed at all. The reasons for this are unclear, but the apparent result is that scent has a direct, hardwired connection to memory and likely to the subconscious.

Eric Spangenberg, former dean of Washington State University’s College of Business, conducted a study of shopping behavior over 18 days using a simple, orange scent versus a blend of many different scents. Consistently, shoppers exposed to the simple, orange scent spent 20% more than shoppers exposed to the blended scent.

Scent marketing may sound hokey, but it influences you on a daily basis, and is used by the world’s biggest corporations. Modern Restaurant Management reports that companies like Starbucks and Cinnabon use scent marketing in their stores to increase revenue. Starbucks apparently pumps specific coffee aromas though their HVAC systems, and Cinnabon makes sure their stores, both inside and out, smell like fresh cinnamon rolls round the clock. Bloomingdale’s, Hyatt, and Cineplex rely on scent marketing as well. According to Modern Restaurant Management, studies suggest that 59% of customers are likely to spend more if a store smells good.

A Nike study demonstrated that certain scents increased positive customer perception of shoes in 84% of subjects. Additionally, customers were willing to spend between 10% and 20% more for products they wanted when they were in a scented situation.

A “scented situation” sounds like it could be good, or very bad. If a scent is simple and pleasing, like orange, it could make a 10-20% positive difference in price; however, this implies that if the scent is a bit off, it could make a significant negative difference in price as well.

Since nothing matters in the world of this blog if it doesn’t relate to real estate, it’s essential to note that a 10% difference in price on a $500,000 home is $50,000. Even if your scent marketing boosts the price 2%, that’s an extra $10,000. If the house smells a bit off, that’s thousands of dollars the listing agent and the seller might be losing.

Choosing a home is deeply associated with comfort, nostalgia, and memory. The idea of what we want in a home is usually rooted in recall of places and situations that made us feel comfortable as children, or during whatever times in our lives we remember with happiness.

But home buying is based on objective and reliable market data, right? So how could smell make a significant difference?

We like to think that home valuation is objective and scientific, and there is truth to this. However, Zillow’s recent foray into iBuying calls this into question. After only eight months of a $450 million home buying program based on its AI estimates, Zillow abruptly ended this program because its home estimates were not reliable. CEO Richard Barton said that “We’ve determined the unpredictability in forecasting home prices far exceeds what we anticipated… Put simply, our observed error rate has been far more volatile than we ever expected possible.”

Home buying is based on hundreds of intangible factors and constantly changing trends, both progressive and nostalgic. This is not to say that home valuation estimates are meaningless, only that they are much less precise than we tend to think. A good valuation estimate can only get you a ballpark figure; it’s the other, intangible factors that can make a difference of tens of thousands of dollars, or even millions in certain neighborhoods.

Imagine you tour two houses that look similar, but one of them smells subtly fresh, like lavender, and the other smells a bit dank. It’s difficult to quantify the possible price difference between these homes; that said, if you like a house but it smells weird, you’re likely going to view any minor imperfections more negatively. A house with a fresh, pleasant smell makes minor imperfections seem less disturbing.

So what scents should you go out and buy for your current listings, if you’re a real estate agent? In The Wall Street Journal, Eric Spangenberg recommends these scents for open houses: orange, lemon, basil, tea, cedar, pine, vanilla and cinnamon. He recommends not mixing scents, and not making them too strong. If the scents are confusing or too intense, people are distracted by trying to figure out what they are, and where they’re coming from. The scent should be subtle, to give a hint of a feeling, but not so much that it takes focus from the house.

In the spirit of not mixing scents, it goes without saying that a base layer of neutral, clean smell should ideally permeate the house before any other scent is subtly added. If you can encourage your seller to do a thorough cleaning of the place, or hire someone to clean it, they will likely get a higher price for their property, and you will increase your commission. Cleaning can be time consuming and expensive, but if you send your seller an article like this one with a bunch of statistics and citations, they may be more motivated to shell out time and/or money to create an inviting olfactory environment for their potential buyers.

Whether you like it or not, your real estate transaction smells; it’s up to you to determine whether this is a good or bad thing.








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