As someone who doesn't live with dogs, the smell of a home with dogs (or cats, for that matter) is, in most cases, immediately apparent to me. If you're not habitualized to the smell, it does actually stink. Not terribly, but it's there.
Thus the answer. If you live in a super clean environment devoid of most smells, you don't get used to them and they stand out. If you are used to the smells, then the smells become norm and nobody bats an eye.
The point is to keep the smells in reasonable control to a point where its not overpowering. Like dogs do smell. After a month or so they get pretty filthy and stinky. However the fist week/2 they are perfectly fine.
