The way i think it will work, is that players will have selectable plots in each zone.
How many plots there is in a zone is depending on the size of the zone.
Alliance players can't place their house in Horde only zones, and vice versa. All neutral zones should be fair game though.
You cant place your home inside capital cities. We dont need more reasons to be in Stormwind or Orgrimmar.
Only you and people in your party can see your house in the overworld, so your home is instanced/phased kinda like Garrisons.