Yes, it's possible to get a high price for a beat-up record, if it's exceptionally rare. Or at least you won't the second time around. So accurately grading your discs is important, whether you're selling your records to a dealer or selling them to another collector. In an ideal world, every record would be played before it is graded. But the time involved makes it impractical for most dealers, and anyway, it's rare that you get a chance to hear a record before you buy through the mail.
Some advertisers play-grade everything and say so.
But unless otherwise noted, records are visually graded. How to grade. A nearly perfect record. The record should show no obvious signs of wear. A 45 RPM or EP sleeve should have no more than the most minor defects, such as almost invisible ring wear or other signs of slight handling.