You can create custom tags for the conditions of your books and even require students to help track conditions when they return books.
The Condition field is a custom tag available to assign to each copy of a book. This field is customizable in your Settings->Adding Your Data. Here you can create your Conditions and check the boxes to "Track Conditions" and "Prompt for Condition at Checkout/Return."
To assign Condition tags, go to your Teacher Library->Copies, Locations, and Conditions. Click edit next to the title you wish to tag, then select the Condition from the drop-down menu and click save.
To search Condition tags, first be sure that the "Track Conditions" box is checked under Settings->Adding Your Data and the "Condition" is checked as view-able in your teacher and student views of the library under Settings->Library Data.
Then, from the student view of the library, or from the "Copies, Locations, and Conditions" page of the Teacher library, type the prefix "condition:" into the search bar, followed by your condition (no spaces). All titles with a copy tagged in that condition will show up in your search results.
If you have checked the box to prompt for condition at checkout/return, then your students will be required to enter a condition from the drop-down when they checkout and return your books.