oi i tried replying ages ago and wrote a huge answer but it didn't go!!
anyway, i'm sorry to correct you Pedro but the house is not always built just for the event. What has happened a lot in the past is people lend their houses to the event, so there are a few rules to follow, like not change the original structure of the house, or give it back to the family the same way it was lent. since the houses are usually really old and have been in the family for a really long time i'm sure they don't mind a bit of renovating the architects do! (However the bigger the event gets, the harder it is to find a place to put it. Sao Paulo's for instance has gotten so big i think it'd be difficult to fit in a normal house!)
so yeah, basically the company that runs it invites the most influential architects to do the event, and ask them to say which room they'd like to do the most. that's where the whole 'who knows who' game begins. it's hard to get the room you want, unless you're close to someone from the company, or you have a big sponsor, etc. It's all pretty ridiculous.
Then 2,3 months before the opening the renovations begin. The architect usually borrows the furniture etc. from shops for free, and in exchange they get publicity. Sometimes they're sponsored by big brands, sometimes the whole money for the renovation comes from their own pockets.
It's the best way to get publicity and for the potential clients to see what your work's about.