The country's largest retail chain, Sears Roebuck, and the nation's number one brokerage company, Merrill Lynch, are taking each other on in a field new to both: residential real estate sales.

Thus far, say insiders, the retailer has the strategic advantage but the broker has the edge in publicity. Regardless of who wins, the competition is bound to have a significant effect on the future structure of the property transfer industry.

Through subsidiaries, Sears has required six real estate firms and half interest in a seventh during the past three years. In late September, Merrill Lynch announced it intended to purchase eight to 10 firms by the end of this year. The entry of these two giants of American enterprise into the real estate field has led some seers to predict a "nationalizing" of home buying and selling.

In a recent article, Forbes magazine cited the rapid growth of real estate franchises during the past five years. With more than 30 chains with 10,000 franchises grossing $800 million a year in commissions, they still equal only one-sixth the number of fast food franchises. Yet real estate franchises are growing at an annual rate of 30 percent, compared with 11 percent for the fast food business.

When franchising began, many brokers were afraid of losing their independence. Acquisition presents an even graver threat for some, so the process may be slower. Merrill Lynch now says it hopes to have signed "several" firms by the end of the year.

Sears has a target of three acquisitions a year. Moreover, as both are interested only in leaders in their respective areas, a few of the same companies are being courted by the two giants as well as by franchisers. The competition is particularly keen in Atlanta, Dalls and Houston.

Sears' involvement in residential real estate came about through its wholly owned subsidiary, Allstate Enterprises, which acquired Executrans, a Greenwich, Conn. relocation service, in 1976. Sears traded half its interest in Executrans last August for a 6 to 7 percent interest in Coldwell Banker, a California-based, diversified real estate services firm that had about $205 million in revenues in fiscal 1978.

Coldwell Banker, established in 1906, acquired Routh Robbins of Alexandria in 1976. Thorsen Realtors in suburban Chicago, 1977, and this year, Hardin Stockton of Kansas City, Nationwide Find-a-Home Service of Hinsdale, Ill, plus Executrans.

Coldwell Banker's president, C. Wesley Poulson, said in an interview that his company's 10-year financial plan calls for three acquisitions a year, primarily of residential firms, plus 15 to 20 percent internal growth annually, largely in commercial property. He also denied rumors that Sears plans to acquire the rest of Coldwell Banker, although he said the retailer might increase its equity interest.

Poulson believes the competition between the two giants will help establish prices in the marketplace and convince independent firms to sell out. Although he doesn't think the "little" broker will completely disappear, he sees acquisitions and or franchising as the wave of the future, a means of making the industry more professional.

He foresees a trend a vertical integration in the real estate industry, sort of one-stop home shopping where the company finds the house, conducts the transfer and title search, finances the purchase and insures the property.

Coldwell Banker already has divisions for mortgage banking property and asset management, insurance, escrow, and residential agents and brokers. In August it set up a new subsidiary, Guardian Title Inc, to handle title insurance Allstate Insurance Co., another Sears subsidiary, offers homeowners insurance.

It is Sears' use of subsidiary without the well-known retailer's name that prompts one industry insider to accord the publicity edge to the company most bullish on America. Merrill Lynch got into real estate in 1977 through purchase of a White Plains, N.Y. relocation firm. Now called Merrill Lynch Relocation Management Inc, it is the largest of its kind in the country, having brokered the sale of about $780 million in houses last year through its 48 certified brokers across the country.

Last September Charles D. Atwood, president of the newly formed Merrill Lynch Associates Inc. announced its acquisition plans. In an interview this week he denied industry rumors that Merrill Lynch is having difficulty, adding, "We have not been turned down by anyone to whom we've made an offer."

A spokeswoman for Long & Foster, Merrill Lynch's Washington area relocation broker, said her company had been approached, "but we cannot be acquired at this time." She added, "However, no one ever closes the door entirely." Atwood called her last statement correct, an indication that Long & Foster may be holding out for better terms.

Although Atwood refused to discuss terms, which he said would be negotiated separately for each deal, a person familiar with one negotiation said Merrill Lynch was proposing to acquire a 75 percent ownership in exchange for its corporate stock with a five year management agreement with the firm being acquired.He was also silent on Merrill Lynch's future plan beyond the eight or 10 announced acquisitions.

Atwood declined to discuss any individual negotiations. Talks with a dozen Merrill Lynch relocation brokers around the country and other sources revealed that the most likely targets are in Houston and Atlanta. Jim Shindler, president of Shindler-Communs in Houston, said negotiations began two months ago and if successful, could result in acquisition by the second quarter of 1979. Shindler-Cummins, with seven offices and 125 employes, is among the top brokers in its area.

In Atlanta the competition seems to be between independent Barton & Ludwig and Northside Realty, Merrill Lynch's relocation broker, ranked one and two respectively in the market. A major franchise is also after the first of these. Co-owner L.T. Ludwig said Merrill Lynch made a presentation several weeks ago but no date had been set for another meeting. Barton & Ludwig, privately held, sells about $400 million a year, primarily residential. Northside also acknowledged it had been approached.

Thus far Sears Roebuch/Coldwell Banker and Merrill Lynch are the only two real estate empire builders, although Poulson predicts that 200 large companies might eventually be interested in getting into the acquisition business. Banks, he said, would present the most formidable competition were interstate banking restrictions ever changed.

Atwood, on the other hand, said he was not convinced others would enter the field. He stressed his position that the real estate industry is still primarily one of local firms, although they will have to become more specialized and more professional to complete with national companies.