It's in whatever condition it's in after a year. I carry mine naked so it may be mint or have a few scratches. Some years I get lucky and swap it out for a refurb in pristine condition right before the one-year warranty expires.
I have at&t unlock it free of charge after I upgrade to the newer model so the unlock alone fetches more $$$ than the condition the iPhone is in, i.e., you'll get more for a year-old unlocked iPhone in fair condition than a locked one in pristine condition.