"Grandma and grandpa are eating at our house."
Translation:Mormor og morfar spiser hos oss.
'works' translates to 'virker' in this context, as it's not performing a job.
Prepositions don't always translate directly and depend the context. In addition to this there will be other ways of expressing something in one language that would be wrong in another language. "hos oss" means something like "with us", and is how you express "at our house" in Norwegian.
"på vårt hus" would mean "on the house", either on top of or on the sides of it.