Definition
Condition is the documented physical state of an item — surface, edges, corners, color, structural integrity, and any flaws or repairs. Condition is the single most important value driver for graded categories (cards, comics) and a significant driver for everything else.
Why it matters
Single-grade differences in condition can swing realized prices by 10x or more in some categories.
Example
A 1956 Topps Mickey Mantle in a PSA 8 (Near Mint-Mint) condition slab. The same card in a PSA 9 might sell for several multiples; in a PSA 6, a fraction.