Rejecting your bid outright, for any reason or no reason, would be in
line with the terms you stated. Asking for more money is bait and
switch, not covered by the terms you stated, at least unethical and
quite possibly illegal.

Drop a note to any newspapers or websites they advertised this fake
"auction" in revealing details and naming names. Bank, auction house,
whoever is involved that you can run down names for. They handed you a
brush full of tar, the least you can do is smear them with it.

If they want to fart around with a reserve price, the minimally correct
response at the time of auction is to say that the reserve has not been
met and there is no sale. The actual correct procedure is to start
bidding at the reserve price and if nobody bids, it don't sell. When
they care to admit that the place is not worth the price they want, then
it might get to selling - otherwise the town/city will soon have it
since they probably are not paying taxes on it, and the town/city will
auction the thing in a real auction.

--
Cats, coffee, chocolate...vices to live by