I did not allow the kids to use pencil first- black crayon only. I do a lot of projects (especially with my younger grades) like this because so much time is spent erasing and I'd much rather have their work honest, real, and fresh.
We also talk about composition (large drawings on large paper) an filing up the paper, even by simply coloring the background one color to fill up the space!!
*I will also add that yes, I DO draw the "heads" for them....I go around the room and ask each student how many people live in their house. This way you avoid heads that are too large or too small...then they do the rest of the work!