Rapid growth of demand for various wireless communication services has led the industry and the researchers to investigate on new generation of telecommunication systems. One of the main objectives in designing and developing these systems is to provide the mobile users with a robust connection to different networks so that the users can move freely between heterogeneous networks while running their computing applications. Handoff (HO) is a process, which maintains a mobile user's active connection as it moves within wireless networks and vertical handoff (VHO) considers handoff between different types of networks or otherwise stated between different network layers. Optimizing vertical handoff process is an important issue of research, which leads to reduction of network signalling and mobile device power loss and on the other hand improves network quality of service (QoS) and grade of service (GoS). In this paper a new vertical handoff algorithm in multitier (overlay) networks has been proposed. This algorithm uses pattern recognition to estimate user's position and decides on the handoff based on this information. First the concept of proposed algorithm for vertical handoff is discussed and the pattern classifier structure is presented, then we talk about the simulation environment and some optimizations for our algorithm. Finally a performance analysis is done and results are compared with traditional algorithms for vertical handoff. These results demonstrate a significant improvement with proposed algorithm.